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Michael Burry Betting on *Halliburton*? Is This Guy Nuts?
Okay, let's get this straight. Michael Burry, the "Big Short" guy, the dude who made a fortune betting against the housing market, is now bullish on Halliburton? Halliburton, as in, the oilfield services company? I swear, sometimes I think these Wall Street wizards just throw darts at a board of company names.
Burry's Scion Asset Management disclosed a new position in Halliburton, along with Pfizer, Molina, and Lululemon. Talk about a mixed bag. It's like he's building a portfolio based on whatever random thoughts pop into his head during his morning coffee. But Halliburton? Really? [Source Title]
The "Expert" Take: More Hype Than Substance?
So, the "experts" are saying Halliburton is poised to "shock investors." Right. Because Wall Street never gets anything wrong. Apparently, a bunch of analysts have upgraded the stock, citing a cyclical bottom in the oil services sector. They're saying that after a tough year, things are gonna magically turn around. Color me skeptical.
Rothschild & Co Redburn initiated coverage with a "Buy" rating and a $35 price target. Jefferies raised their target to $32. Goldman Sachs, not to be outdone, chimed in with a $28 target. TD Cowen went full-throttle with a $38 target. It's like a bunch of lemmings running off a cliff, except instead of lemmings, it's analysts and instead of a cliff, it's... well, you get the idea.
They're all basing this on the idea that the oilfield services sector is about to boom. Global upstream capital expenditures are forecast to grow, they say. Existing oil field decline rates are accelerating, they claim. National oil companies are expanding capacity, they predict.
Here's a question: Are these the same geniuses who told us inflation was "transitory" last year? Because if so, I'm not buying what they're selling.
Halliburton's third-quarter results beat expectations, sure. They generated $5.6 billion in revenue. But let's not forget about that little $478 million charge that resulted in a measly $18 million in GAAP net income. Adjusted earnings were better, but still... it's like putting lipstick on a pig.
Cost-Cutting and AI Dreams: Smoke and Mirrors?
Halliburton is aggressively cutting costs, which is always a good sign... or is it? They're idling equipment, trimming budgets, and streamlining their organization. Translation: they're laying people off to make the numbers look better. It's the classic corporate playbook.
But wait, there's more! Halliburton has partnered with VoltaGrid to supply power for AI data centers. Because apparently, the future of oilfield services is now powering Skynet. They even secured a project to supply Oracle's upcoming AI cloud facilities. I'm sure that'll offset any losses from the downturn in oil drilling. NOT.
And then there's the strategic diversification into growth markets. Sure, they're trying new things. But let's be real: Halliburton is an oilfield services company. They drill for oil. They frack. They get their hands dirty. Suddenly becoming a power supplier for AI data centers sounds like a desperate attempt to stay relevant in a world that's slowly but surely moving away from fossil fuels.
Oh, and Michael Burry disclosed a new position in Halliburton through his Scion Asset Management fund. Burry’s contrarian investment approach and track record of identifying mispriced opportunities adds credibility to the bullish thesis. Or maybe he's just wrong this time. Even geniuses strike out sometimes.
Institutional ownership remains strong at approximately 86% of outstanding shares, indicating large money managers view Halliburton as a core energy sector holding despite recent challenges. Maybe they know something I don't. Maybe I'm just being cynical. Then again, maybe they're all just caught in the same echo chamber, patting each other on the back and congratulating themselves on their brilliant investment strategies.
The Bottom Line: Don't Believe the Hype
Halliburton's valuation metrics provide insight into its market positioning:
Valuation Ratios: The company's P/E ratio is 18, close to its 2-year high, while the P/S ratio is 1.06, and the P/B ratio is 2.24.
The company's P/E ratio is 18, close to its 2-year high, while the P/S ratio is 1.06, and the P/B ratio is 2.24. Analyst Targets: The target price is set at $29.22, with a recommendation score of 2, indicating a favorable outlook.
The target price is set at $29.22, with a recommendation score of 2, indicating a favorable outlook. Technical Indicators: The RSI (14) is 65.97, suggesting the stock is nearing overbought territory.
The RSI (14) is 65.97, suggesting the stock is nearing overbought territory. Ownership: Institutional ownership stands at 86.59%, with insider ownership at 0.88%.
So, What the Hell is Going On Here?
Look, I'm not saying Halliburton is going to zero. I'm just saying I don't buy the hype. The oil services sector is volatile, the company's diversification efforts are questionable, and the analyst upgrades feel suspiciously coordinated. Michael Burry might be a genius, but he's also human. He can make mistakes. And I think, this time, he might have just made a big one.