What Benjamin Graham said more than half a century ago still holds true. In the short term, the stock market behaves like a voting machine, but in the long term, it acts like a weighing machine. In short, the true value of a stock will be revealed in the long run.

The oil field services industry has collectively taken a hit since the markets tanked a couple of months back over fears of another recession. However, I’m going to show you one major player in this space whose stock has plunged a whopping 43% since July 25 this year compared to the S&P’s 14% decline: Halliburton (NYSE: HAL) . To me, this stock looks nothing short of a mouth-watering buy.

Why Halliburton?
It’s economics 101. Global demand for oil and natural gas is shooting up. Despite falling energy prices, production is hardly affected. Exploration and production companies need the help of oilfield services companies in a big way. With the advent of newer and hotter shale plays in North America, the potential for these specialised services is huge. This is where Halliburton’s substantial expertise is required.

The services provided start right at the infant stage. From prospecting for new resources to providing operating implementations, Halliburton is a one-stop solution that upstream companies can’t ignore. The company’s software solutions to minimise risk and increase efficiency are just a small part of the deal.

Rig count in the United States along with horizontal drilling activity has increased substantially along with a shift to oil and increased drilling activity in liquids-rich shale basins. Technological advances in drilling have undoubtedly increased demand for oil field service companies, and this should only become stronger over the next few years.

Again, geopolitical disturbances in North Africa seem to be easing. With operations in Egypt recovering and drilling companies looking to restart operations in Libya, revenue prospects are fuller. Halliburton should see higher cash inflows here.

In terms of the stock, the company looks pretty attractive. Here’s how it stacks up against its peers:

Company

Forward P/E

P/B

Dividend Yield

Halliburton 7.9 2.6 1.1%
Schlumberger(NYSE: SLB) 12.7 2.6 1.6%
Baker Hughes International(NYSE: BHI) 9.2 1.4 1.2%
Weatherford International(NYSE: WFT) 9.6 1.0 N/A
National Oilwell Varco(NYSE: NOV) 11.0 1.4 0.8%

Source: Capital IQ, a Standard & Poor’s company and Yahoo! Finance.

Forward price-to-earnings is where things look attractive. Again, a relatively higher price-to-book of 2.6 doesn’t really bother me. Halliburton has bought back shares worth $3.4 billion in the last five years. While the dividend yield isn’t too impressive, it’s worth the deal.

The confidence management has in its business model, even in these times of recession, is commendable.

Here is a company that has reported a 36% growth in revenue in the last 12 months despite seeing disruptions in various locations around the world. Most notable has been the bad name it had received following the Gulf of Mexico oil spill last year. Halliburton was responsible for cementing BP‘s (NYSE: BP) Macondo well that involved Transocean‘s (NYSE: RIG) rig explosion. However, the moratorium that followed in the Gulf hardly seemed to have an effect.

International operations are where I’m betting high. Contracts awarded by Statoil andChevron (NYSE: CVX) in Europe and Asia, respectively, are where things are only warming up. The emerging economies of China and India cannot be ruled out with regards to further investments. Investors should watch out.

Foolish bottom line
I’m having a hard time figuring out why investors are running away from this stock. But that’s where savvy investors get greedy. If you’re looking for Australian stocks to profit off the energy boom, check out The Motley Fool’s special report, “The Best Stock For $100 Oil“. You can download it for free by clicking here.

Article written by Isac Simon and originally published at Fool.com. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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