By: Todd Shriber

The results should be so much better. Despite some volatility in March, oil futures, both West Texas Intermediate and Brent, are still sporting some healthy year-to-date gains. The same cannot be said of the oil services sector, broadly speaking. Sure, the Market Vectors Oil Services ETF and the iShares Dow Jones US Oil Equipment Index Fund are still in the green on a year-to-date basis, but those funds plunged 8% and 8.7%, respectively, last month.

Much of the March drama surrounding the oil services group can be blamed on Baker Hughes (NYSE:BHI). On March 21, Baker Hughes said its first-quarter pretax operating profit margin would be below that of the fourth quarter because more energy producers are shifting to oil production away from natural gas production. By the time March was over, Baker Hughes had tumbled 17.4%.

Perhaps the best thing that can be said of this particular stock is that it looks like can find support at $40. If not, shorting Baker Hughes, buying puts or just staying away will be the best ways of approaching the stock.

Shares of Halliburton (NYSE:HAL), the world's second-largest provider of oilfield services, dropped nearly 9% last month, falling from around $36 to $33 following the Baker Hughes warning. The silver lining as it pertains to Halliburton is that the company's natural gas exposure isn't on par with that of Baker Hughes, so it can argued that the selling pressure with this particular name is overdone. In late March, FBR Capital put a $55 price target on Halliburton, implying significant upside from current levels.

For those willing to take on a bit more risk, there is Weatherford International (NYSE:WFT). Weatherford was not only hurt by the Baker Hughes news, but the company has some accounting/tax issues that have given investors pause in recent weeks. Weatherford has a new CFO and while it should be noted the chart isn't particularly strong, the stock does trade around $15 with an average analyst price target of just over $21.

Arguably one of the highest quality names in the oil services group is National Oilwell Varco (NYSE:NOV). This is another example of a baby being thrown out with the Baker Hughes bathwater. The stock dropped 5.4% in March, but that's good comparatively speaking.

National Oilwell is buoyed not only by a strong balance sheet and savvy management team, but also by the fact that as more oil rigs around the world need to be updated to meet new safety standards, that will benefit NOV because it makes many of the parts that need to be replaced on offshore rigs. Trading below $80, NOV is actually a steal because it has the potential to rise to the $95-$100 area.

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Tickers in this Article: BHI, HAL, WFT, NOV

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