Quantcast

Why Cimarex Energy Co. Stock Is Soaring Today


What happened

Shares of Cimarex Energy Co. (NYSE: XEC) rallied about 10% by 2:30 p.m. EST on Wednesday, after the oil and gas producer reported stronger-than-expected third-quarter results.

So what

Cimarex Energy pumped out $189.6 million, or $1.99 per share, of adjusted net income in the third quarter, which was an impressive $0.43 per share ahead of analysts' expectations. Driving that strong showing was oil production, which surged 13% year over year and 4% from the second quarter, fueled by strong drilling results in both the Permian Basin and Mid-Continent region.

Several oil pumps in a row with a bright sun shining on them.

Image source: Getty Images.

The company also reaffirmed its full-year outlook. Cimarex expects to invest $1.6 billion to $1.7 billion this year, which should give it the funds to grow production 17% to 18% compared to 2017's level, with oil expanding at a 21% to 23% year-over-year pace. Meanwhile, with the recent sale of some noncore acreage, the company ended the quarter with $864 million in cash, which pushed its leverage ratio to its lowest level in years. That gives it the financial flexibility to pursue opportunities that might arise in the future.

Now what

Cimarex Energy had been one of the worst-performing oil stocks this year before today's rally. However, even with that pop, it's still cheap given its growth prospects and the earnings and cash flow it can generate at current oil prices . That's why it's still one of the top oil stocks to consider buying these days .

10 stocks we like better than Cimarex Energy
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Cimarex Energy wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 6, 2018

Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Personal Finance , Stocks
Referenced Symbols: XEC



More from Motley Fool

Subscribe






Motley Fool
Contributor:

Motley Fool

Market News, Investing










Research Brokers before you trade

Want to trade FX?