Halliburton is the second-largest holding in both OIH and IEZ at weights of 11.5% and 9.9%, respectively. This month, more than half of analysts’ oil services earnings revisions have been negative, according to Yardeni Research.
Since the sector’s sell-off, many energy names are trading at cheaper values relative to the broader market. For instance, IEZ has a 17.49 price-to-earnings ratio and a 1.28 price-to-book while XES shows a 15.04 P/E and a 0.92 P/B. [Oil Services ETF Could Surge]
Investors should keep in mind that the oil services sector is heavily reliant on capital spending cycles in the energy industry. The recent sharp cuts in capital expenditure budgets in 2015 contributed to the pullback in oil services – U.S. companies are expected to spend about 20% less than the average over 2014, with some cutting expenditures by around 50%.
SPDR Oil & Gas Equipment & Services ETF
