SLUMPING OIL AND NATURAL-GAS PRICES this year have taken a bite out of nearly all energy shares, and exploration and production company Hess (HES) is no exception. Yet a good portion of the stock’s recent 32% drop, to $44.60 from its 2012 high around $67, is self-inflicted.
On April 25, Hess reported first-quarter net of $509 million, or $1.50 a share, down from $619 million or $1.82—a bit less than expected. (Both periods’ results exclude extraordinary items.) Meanwhile, revenue at the mostly oil-producing company—its output is 70% liquids and 30% natural gas—fell 7%, to $9.75 billion.
Still, this wasn’t what caused investors to dump the stock. In a conference call, Hess reduced its production expectations for its important Bakken fields in North Dakota to less than 60,000 barrels per day oil equivalent (Bpoed) from 60,000 Bpoed. Currently, it averages 47,000 there. In addition, it suggested that it might have to raise 2012 capital expenditures higher than its original $6.8 billion guidance. The market took that badly. Hess stock fell 7% that day and slid as low as $44.10 Wednesday. And analysts have been piling on, with at least six cutting their rating on the stock since mid-April.
[…] any stock achieve. Note only do I believe it will come back but double within 3 years or less. Also check out Barron’s Article May 21st.This is a checklist I use to quickly come to a conclusion on a stock. I score a stock, each line […]