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Money Morning's "unloved" pick of the week is oil services company Halliburton Co. (NYSE: HAL).
An unloved investment is one that's been beaten down – but is actually a great value. Investors then get an amazing entry point into a good long-term investment.
Halliburton was recently singled out by Money Morning Chief Investment Strategist Keith Fitz-Gerald, a seasoned market analyst with 33 years of experience.
Halliburton Co. (NYSE: HAL): About the Company
Halliburton was founded in 1919 in Oklahoma by Erle P. Halliburton, who borrowed a wagon, a team of mules, and a pump to start his oil-well cementing business. Now based in Houston, Texas, Halliburton is the world's second-largest oil field services company. With operations in approximately 80 countries, HAL sells labor services and drilling equipment to the oil and natural gas industries. Halliburton has a market cap of $45.5 billion and employs about 80,000 people. The Chief Executive Officer is David J. Lesar. And yes, former Vice President Dick Cheney once served as Halliburton's CEO.
Halliburton Co. (NYSE: HAL): Why It's Unloved Right Now
HAL stock fell by 35% from July 23, when it hit a 52-week high of $74.33, dropping as low as $48.17 on Oct. 15. It has only slightly recovered since, trading at just under $55.
The main reason for the plunge of Halliburton stock is the dramatic fall in oil prices. The price of oil nosedived from over $100 a barrel at the start of July to below $85 in October. Oil has continued to slide in November down to about $75.
Cheaper oil means less profit for the oil producers and less money to spend on Halliburton's products and services. The glum short-term oil price outlook has scared investors away from the entire sector.
"Many great companies related to energy have gotten slammed in a classic 'guilt by association' move," explained Fitz-Gerald.