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Strong Oil Prices Drives Murphy’s

David Becker
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www.iforex.com

WTI prices have been moving higher and pierced the $103 per barrel level as strong demand for heating fuels has buoyed petroleum prices. Murphy Oil Corp Holding Co (NYSE:MUR) is an exploration and production company.

The stock price has moved higher on the heels of higher crude oil prices which have received a boost given the strong demand for heating fuels. Additionally, Murphy Oil is thinking about selling its Asian assets and could receive up to $3 billion for these assets as it tries to scale down operations in the region.

The 52-week range of MUR is $ 43.91 – $66.20, and the stock hit a 52-week high in November. Earnings were down 39% quarter over quarter, but the three year growth rate of earnings was a positive 33%. Sales increased 3% quarter over quarter and the three-year growth rate of sales was down 39%. The profit margin is 5.5% and the company boasts a dividend yield of 2.1%.

There have been recent insider purchases of the stock which should give investors’ confidence. Director Claiborne P. Deming, who was the CEO of Murphy Oil from 1994 to 2008, acquired 30,000 shares of this oil exploration & production company, paying $56.67 per share for a total amount of $1.7 million. Mr. Deming increased his stake by 1.89% to 1,619,538 shares with this purchase. There were no insider sales in February.

The stock tumbled in January and then rebounded after testing support near $54 per share. Resistance is seen near the 50-day moving average at 61. Momentum is strong with the MACD (moving average convergence divergence) generating a buy signal in early February. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The RSI is flat reflecting the recent consolidation and printing near 45, which is in the middle of the neutral range.

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