By Mike Mackin, Writer and Portfolio Manager, The Oxen Group
Today we take a look at six oil and gas related companies and their historical performance in March. These companies span over three industries related to oil and gas (NYSEARCA:USO): Major integrated oil and gas, oil and gas equipment and services, and oil and gas drill and exploration. March has been a good month for oil historically with a 5.2% average during March for the West Texas Intermediate spot price since 1992. The biggest loss for WTI has been -7.8% and the largest gain has been 22.5%. Recently, oil has been even better with gains for the last eight March periods and nine out of the last 10. Here we cover Chevron (NYSE:CVX), Halliburton (NYSE:HAL), Nabors (NYSE:NBR), Transocean (NYSE:RIG), Schlumberger (NYSE:SLB) and Exxon Mobil (NYSE:XOM).
The first graph shows the average gains for each company during March since 1997.
- Every company averages positive gains during March
- NBR averages the greatest gains at 7.5%
- CVX and RIG average the smallest gains during March at 2.20% and 2.23%, respectively
The final chart breaks down each company's performance during March a little further, giving the amount of March periods (out of the past 15 years) they have been up/down and the maximum gains and losses seen during March since 1997.
- The most consistent stock during March is HAL, up 12 out of the past 15 March periods.
- HAL also has had the smallest maximum loss at -3.83%, the second largest maximum gain at 30.75% and the second largest average gains.
- Each company has had larger maximum gains than maximum losses.
- The worst performing stocks are CVX and RIG, up only 60% of March periods as well as posting the two largest maximum losses.
HAL March 16th $36/$35 Bull Put Spread and Long Stock -
We think that HAL is not going down at all in this period of time. Sell a bull put spread to take advantage of premium. The recent strength has taken out some premium, so we would wait for a dip day to do any bull put spreads. To accompany that dip, we would buy the stock.
SLB March 16th $72.50/$70 Bull Put Spread -
Given the data, SLB looks solid as well. The oil market has strength right now, and SLB looks like it will be a follower with this market. The data also suggests limited downside. We like this bull put spread as it is below any technical support lines.