The turmoil in the markets makes it too easy to justify selling any stock these days. Yet, while his own panic never helps an investor, it's still a good idea to play devil's advocate with investments.
Consider oilfield services outfit Halliburton (NYSE: HAL). Though energy needs will not evaporate anytime soon, you'll find a few of the 2,871 Motley Fool CAPS members weighing in on the company offering reasons to be bearish.
Here at The Motley Fool, we like to consider both the good and bad sides of an investment. Below, I've highlighted three of the main bearish arguments on Halliburton. Be sure to read the bullish side as well, and then weigh in with your own comments below or rate Halliburton in CAPS.
1. Weak earnings
Although Halliburton beat earnings expectations and saw improvement over the second quarter, it still experienced a drop in third-quarter earnings, joining a list of others like 800-pound gorilla Schlumberger (NYSE: SLB), Baker Hughes (NYSE: BHI), and head-turning drillers like Transocean (NYSE: RIG). Halliburton's profits dropped 61% from last year as lower commodities prices hurt demand for its services, a trend that some investors believe could drag on.
2. Pricing pressure
Despite better recent financial results, oilfield services companies like Weatherford (NYSE: WFT) and Halliburton aren't commanding the same prices as they were in the past from oil and gas companies like ExxonMobil (NYSE: XOM) and BP (NYSE: BP). Halliburton recently warned of further pricing pressure in the fourth quarter and potentially sinking margins -- another troubling aspect if the trend continues.
3. Fragile market
The price of oil has regained some of its strength after its dramatic fall last year, but Halliburton feels that with high storage levels and other weak fundamentals, current crude prices still make for a difficult environment. It still sees weak demand coming from its customers, with many still spending cautiously, leaving near-term prospects anything but certain.
Of course, Halliburton has thrived despite past obstacles. But the question of its future return to investors is why CAPS is such a great resource to augment your own analysis. To see details of what CAPS members are saying now about Halliburton, just click on over to Motley Fool CAPS and have a look. Or add your thoughts directly to this story in the comments box below.
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