4 Large-Cap Energy Stocks Outperforming The Market With Strong Momentum
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In this article I've presented four large-cap energy stocks in the Oil & Gas industry that have been outperforming the market YTD while gaining strong upside momentum. Below is the chart showing the YTD comparison for the 4 stocks and the S&P 500, including Concho Resources Inc. (NYSE: CXO), Anadarko Petroleum Corporation (NYSE: APC), EOG Resources, Inc. (NYSE: EOG), and Pioneer Natural Resources (NYSE: PXD). Pioneer led the gains with a +20.60% increase in share priceas of Feb. 11, 2013.
Source: Google Finance
Concho Resources Inc.
Concho Resources is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. Concho Resources closed at $96.52 with 0.38% gain on Feb. 11, 2013. Concho had been trading in the range of $76.17-$116.82 in the past 52 weeks. Concho Resources has a beta of 1.21.
On Feb. 7, 2013, Concho provided a 2012 operational update and increased 2013 production guidance. For 2012, the full-year production of 29.8 million barrels of oil equivalent (MMBoe) is 26% more than in 2011. The company increased 2013 production guidance range to 33.4-34.8 MMBoe. On Feb. 13, Credit Suisse initiated coverage on Concho Resources with a Neutral rating and a PT of $94.00.
Fundamentally, Concho has an enterprise value of $13.59 billion. Concho Resources has a total cash of $291 thousand with a total debt of $3.64 billion. Concho Resources has a book value of $32.69 per share. The company generates an operating cash flow of $1.27B with a levered free cash flow of $-2.06 billion. Concho Resources has a profit margin of 14.27% and an operating margin of 32.17%. Concho Resources's ROE is 8.61%.
Technically, the MACD (12, 26, 9) is showing a bullish trend with a diverging MACD difference. The momentum indicator, RSI (14), is indicating a strong buying momentum at 75.61 (above 70 is considered as overbought). Concho is currently trading above its 50-day MA of $85.40 and 200-day MA of $88.86, as seen in the chart below.
Anadarko Petroleum Corporation
Anadarko Petroleum Corporation is an independent exploration and production company owning over 2.5 billion barrels of oil equivalent of proved reserves. The Company operates in three segments: Oil and gas exploration and production, Midstream, and Marketing. APC closed at $83.47 with a 1.16% loss on Feb. 11, 2013. Anadarko had been trading in the range of $56.42-$88.70 in the past 52 weeks, and the company has a beta of 1.50.
On Feb. 5, 2013, Anadarko posted a profit of $203 million for Q4, 2012, or 40 cents per share, which is up from a loss of $358 million or -72 cents per share in the year-ago quarter. Adjusted for special items, the profit came in at $457 million or 91 cents per share, beating analyst' estimate of 72 cents per share, according to FactSet. The share price for APC was boosted by positive earnings.
Fundamentally, Anadarko has an enterprise value of $53.07 billion with a market cap of $41.74 billion. Anadarko has a total cash of $2.47 billion with a total debt of $13.27 billion. Anadarko has a book value of $41.26 per share. Anadarko has a profit margin of 17.97% and an operating margin of 19.23%. Anadarko's ROE is 11.97%.
Technically, the MACD (12, 26, 9) is showing a bullish trend, but the MACD difference converged in the last trading day. RSI (14) is declining but still showing a bullish lean at 65.92. Andarko is currently trading above its 50-day MA of $77.38 and 200-day MA of $70.64, as seen from the chart below.
EOG Resources, Inc.
EOG Resources, Inc. is engaged "in the exploration, development, production, and marketing of natural gas and crude oil mainly in the United States, Canada, the Republic of Trinidad, Tobago, the United Kingdom, etc." EOG Resources closed at $133.34 with 0.05% gain on Feb. 11, 2013. EOG Resources had been trading in the range of $82.48-$133.68 in the past 52 weeks. EOG has a beta of 1.05.
On Feb. 13, 2013, EOG Resources reported a quarterly loss compared with a year-ago profit, as it wrote down the value of Canadian natural gas assets, as reported by Reuters. Excluding items like the $849 million writedown of assets, EOG Resources reported earnings of $1.61 per share, beating Wall Street's expectation of $1.35 per share. The company also lowered its spending projection to $7 billion-$7.2 billion, which is below its spending of $7.6 billion in 2012, as the company will spend less on "money losing" natural gas drilling.
Fundamentally, EOG Resources has an enterprise value of $41.31 billion with a market cap of $36.12 billion. EOG Resources has a total cash of $1.11 billion with a total debt of $6.32 billion. EOG Resources has a book value of $50.93 per share, and generates an operating cash flow of $5.25 billion with a levered free cash flow of -3.17 billion. EOG Resources has a profit margin of 11.21% and an operating margin of 17.45%, and its ROE is 9.10%.
Technically, the MACD (12, 26, 9) indicator is showing a bullish trend with diverging MACD difference. RSI (14) is indicating a strong buying momentum at 70.43. EOG is currently trading above its 50-day MA of $123.54 and 200-day MA of $109.56. EOG is approaching its resistance of $133.38, the R2 pivot point, as seen from the chart below.
Pioneer Natural Resources
Pioneer Natural Resources Company is an independent oil and gas exploration and production company with operations in the United States and South Africa, selling homogeneous oil, natural gas liquid and gas units. Pioneer closed at $128.55 with 0.33% loss on Feb. 11, 2013. Pioneer had been trading in the range of $77.41-$129.26 in the past 52 weeks. Pioneer has a beta of 1.81. The company had a daily call volume ratio of 4.15 on Feb. 11, 2013, where unusual option activities can be an indicator or precursor of major movement for the underlying stock.
On Feb. 13, 2013, Pioneer reported net income of $29M or $0.22 per diluted share. The adjusted income for Q4 was $107M after tax, or $0.83 per diluted share. The company is forecasting annual production growth of 12%-16% from 2012 to 2013 and targeting 13%-18% compound annual production growth for 2013 to 2015. As reported, the company is also "increasing the Company's estimated net resource potential from 6.7 billion barrels oil equivalent (BBOE) to greater than 8.0 BBOE, which includes 1.6 BBOE from the southern horizontal Wolfcamp Shale joint interest area and 3.0 BBOE from Pioneer's northern Wolfcamp/Spraberry acreage." On the same day, Pioneer announced that it is commencing a public offering of 8 million shares of its common stock. According to the report,
the net proceeds from this offering will be used for general corporate purposes, including the acceleration of horizontal appraisal drilling in the northern portion of the Company's highly prospective Wolfcamp/Spraberry acreage position in West Texas. Pending such use, a portion of the net proceeds will be used to repay the outstanding borrowings under the Company's credit facility, with the remaining proceeds to be invested in money-market funds or U.S. treasuries.
Fundamentally, Pioneer has an enterprise value of $19.12 billion with a market cap of $15.84 billion. Pioneer has a total cash of $333.89 million with a total debt of $3.56 billion. Pioneer has a book value of $45.64 per share. Pioneer generates an operating cash flow of $1.86 billion with a levered free cash flow of -1.32 billion. Pioneer has a profit margin of 1.90% and an operating margin of 23.40%, and its ROE is 5.78%.
Technically, the MACD (12, 26, 9) indicator is showing a bullish trend with diverging MACD difference. RSI (14) is indicating a strong buying momentum at 76.70, where above 70 is considered as overbought. PXD is currently trading above its 50-day MA of $111.25 and 200-day MA of $101.91. The next resistance is $132.80, the R2 pivot point, as seen in the chart below.
In short, these 4 stocks are on the run with bullish momentum. Pioneer and Concho Resources are currently in over-bought condition based on the RSI (14) indicator. Fundamentally, investors can review Anadarko as it has the highest profit margin (17.97%) and ROE (11.97%) with the largest enterprise value of $53.07 billion (market cap of $41.74 billion). With the positive earnings report, Anadarko will continue to be a great holding for 2013.
Conservative investors may want to wait for a safer, lower entry point to establish a long-term position, where credit put spread options positions can then be reviewed.
Note: All prices are quoted from the closing of Feb. 11, 2013. Investors and traders are recommended to do their own due diligence and research before making any trading/investing decisions.
NickChiu has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!