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Digging In Small Holes For Big Profits



December 01, 2013 – Comments (0) | RELATED TICKERS: HP


Helmerich & Payne, Inc (NYSE:  HP) is a mid-sized oil exploration company based in Oklahoma.  Despite its size, it has international reach in South America and Africa, but it also operates in the United States, primarily in Rocky Mountain Region.  Its largest contract customers are Devon Energy, BHP Billiton, and Occidental.


Helmerich & Payne has a pristine balance sheet with lots of cash flow, and almost no debt.  The 2.60% dividend yield makes it that more attractive.  The current P/E is 11.58 which is in line with its historical average (12.0).  Top line (49.7%) and bottom line (12.6%) growth rates are strong, and its return on equity (13.7%) shows that it is a well-run business.  Morningstar has it classified as a “Mid Cap Value” stock.  We see it as a company with a good margin of safety; if the price drops to $76.50/share, it will present a great buying opportunity.  Watch this one, and be ready.  With a target price of $87.93, it presents a nice profit potential for those who stay alert.

The following ratings currently exist for Helmerich & Payne:

Morningstar (Hold)

Zacks (Strong Buy)

MSN Money (9/10)

S&P IQ Capital (Hold, 12 month target $80.00)

Thomson Reuters StockReport+ (10/10)

Second Opinion Weekly Report (Long)

General consensus is Hold

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