#8 - Cimarex Energy Co. (NYSE:XEC)
Cimarex Energy Co. (NYSE: XEC) - Mergers and acquisitions are commonplace in the energy sector. However, when these events occur it can be hazardous to the stock price. That’s a key factor that’s weighing on the stock price of XEC. They announced an acquisition of Resolute Energy Company in a cash and stock transaction that is valued at $1.6 billion. According to Cimarex CEO Thomas Jorden, “The Resolute assets are expected to generate free cash flow in 2019, basically funding any additional developmental capital from the start.” Shares of XEC are down nearly 40% year-to-date which is far below the SPDR Energy Select Sector ETF which is down 7% and the S&P 500 Index which is posting a gain of around 2%. Still, analysts are expressing optimism. 67% of analysts surveyed gave the stock a buy rating and the consensus price target of $123.50 gives investors plenty of upside growth from current levels which are close to its 52-week lows. XEC has a market cap of $6.91B and a P/E ratio of 10.58.
About Cimarex Energy
Cimarex Energy Co is an independent oil and gas exploration and production company. Its activities include drilling, completing and operating wells. It operates through the following areas: Permian Basin, Mid-Continent, and Others in Oklahoma, Texas and New Mexico. The company was founded by F. H. Merelli in February 2002 and is headquartered in Denver, CO.
- Current Price
- $87.20
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
Stocks are in correction territory and there’s no clear indicator of where the broader market is headed for 2019. There is sufficient reason for the lack of direction including a concern about a potential government shutdown, rising interest rates and the ongoing trade dispute with China.
However, it’s fair to ask if, after a brutal October and November, this uncertainty has already been priced into the market. Many companies are still strong earnings reports, but those that have not are being punished. However, for the stocks in this presentation, it may be fair to ask if they have been punished too much.
Many investors trade on the news and between mergers, uncertainty regarding the effect of tariffs, or changing business models, these stocks have been battered in 2018. However, analysts are taking the longer view and they are betting that these oversold stocks will rise off the mat and allow investors to profit.
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