Dear all

This week, Halliburton (“HAL”) caught my attention as it closed at US$21.38 on 14 Jun 2019, lowest since 1 Jun 2010 and 7 Aug 2009, amid 10-year low valuations.

Given the basis below, my personal view is that HAL may be presenting a favourable risk reward setup for a long trade.

Potential basis to long

a)  At US$21.38, this is the lowest close since 1 Jun 2010. At 12.5x current PE and 1.9x P/BV (see Figure 1 below), these valuations seem attractive as compared to its 10Y average PE and P/BV 29.3x and 3.2x respectively;

Figure 1: Trading at 9-year low prices amid 10-year low valuations

Source: Bloomberg 17 Jun 2019

b) In a short span of two months, HAL has fallen almost 32% from US$31.59 on 17 Apr 2019 to close US$21.38 on 14 Jun 2019. Although share price has formed a new nine year