The shares of this energy company beat earnings estimates by 15 cents last quarter, and nine analysts have increased their forecasts in the past 30 days.
Cimarex Energy (XEC)
from Stock Picker’s Digest
Cimarex Energy (XEC) produces and explores for natural gas and oil. Gas makes up 64% of the company’s output; the remaining 36% is oil.
Cimarex’s properties are mostly in the Wolfcamp shale area of the Permian Basin in Texas and New Mexico, as well as the Cana-Woodford shale region in western Oklahoma.
In the three months ended June 30, 2015, the company’s production averaged 1.03 billion cubic feet of natural gas equivalent a day, up 22.4% from 838.7 million cubic feet a year earlier.
But even with the higher output, Cimarex’s cash flow per share declined by 47.5%, to $2.72 from $5.18, due to lower oil and gas prices. Its long-term debt of $1.5 billion is a low 13.8% of its market cap.
The stock trades at 10.6 times Cimarex’s annual cash flow of $10.88 share, based on the latest quarter.
But that estimate will change along with oil and gas prices.
Cimarex is a buy.
Patrick McKeough, Stock Picker’s Digest, www.tsinetwork.ca, 888-292-0296, November 2015