Cimarex Energy (XEC) Scales 52-Week High On Oil Recovery

Shares of independent oil & gas exploration and production firm Cimarex Energy Company (NYSE:XEC) hit a 52-week high of $134.07 during Tuesday’s trading session. Also, the stock closed the session at $134.07, which reflects a solid return of 53.9% over the past six months. The average trading volume for the last three months was 891,340 shares.

What is Driving Cimarex Energy?

Since the beginning of March, shares of this Zacks Rank #3 (Hold) company have been witnessing an uptrend. Cimarex Energy’s exposure to crude price volatility is resulting in its steady rise. The West Texas Intermediate (WTI) crude fell to a 12-year low mark of $26.21 per barrel in February. Now, this commodity is hovering at around $48 per barrel, reflecting a whopping jump of approximately 90%.

Cimarex Energy has established a track of focused and disciplined exploration and production (E&P) capital spending that drove growth in the past. Management’s conservatism can be gauged from the fact that the company does not recognize undeveloped reserves as part of its proven reserves for reporting purposes. We expect the company’s continued focus on drilling activities to remain the primary production growth driver. As a result, its successful projects are boosting volumes and reserves.

Also, upward estimate revisions over the last 90 days added to Cimarex Energy’s attractiveness. Analysts have turned bullish on the company’s growth prospects and are therefore pushing up estimates. The Zacks Consensus Estimate for 2016 improved to earnings of 63 cents per share from a loss of 27 cents per share over the last 90 days. The persistent rise in oil price is therefore a major boon for Cimarex Energy.

Cimarex is an independent E&P company. Its primary activities are in the Mid-Continent and Permian Basin areas of the U.S.

Stocks to Consider

Some better-ranked stocks in the same space are Matador Resources Company (NYSE:MTDR) , North Atlantic Drilling Limited (NYSE:NADL) and Devon Energy Corporation (NYSE:DVN) , each sporting a Zacks Rank #1 (Strong Buy).