Concho Resources Inc. (CXO): Is It Now Or Never?

SVP of Finance and Strategy Moncrief Lee Price sold 4,000 shares in Concho Resources Inc. (NYSE:CXO) for $16,193 in transaction occurred on 2018/09/12. After making this transaction, the SVP of Finance and Strategy owns a direct stake of 559,440 shares, worth $1,956,438, as per the last closing price. On 2018/09/12 Burleson Gayle, SVP of Business Development at CXO, dumped 3,600 shares at an average price of $140.82 per share. The selling total is valued at $3,643,327.

Separately, it had been reported that some other CXO insiders also took part of the insider trading activity. SVP of Bus Ops and Eng, Guthrie J Steve had divested 12,500 shares for $35,713 through a trade on 2018/09/11. Following this activity, the insider holds 1,706,750 shares worth $4,314,845 as of recent close. Wall Street’s most bullish Concho Resources Inc. (NYSE:CXO) analysts are predicting the share price to blow past $272 per share during the next 12 months. The current median share price forecast by them is $179.5, suggesting that the stock could increase 48.57% in that time frame. The average price target of $183.93 calls for a nearly 52.23% increase in the stock price.

Concho Resources Inc. (CXO) trading activity significantly improved as the volume at ready counter increased to 3,098,411 shares versus 1,920,575 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,958,658 shares. The share price dropped -5.91% in recent trade and currently has a stock-market value of $24.41B. The shares finished at $120.82, after trading as low as $117.735 earlier in the session. It hit an intraday high Thursday at $125.26. The stock is now -2.27% above against its bear-market low of $123.63 on December 06, 2018. It has retreated -35% since it’s 52-week high of $163.11 reached in May. Now the market price is down -12.65% on the year and down -19.57% YTD.

CXO’s 50 day simple moving average (SMA 50) price is $141.23 and its 200-day simple moving average (SMA 200) price is $142.89. The company’s stock currently has a total float of 198.45M shares. Its weekly volatility is hovering around 3.92% and felt 3.67% volatility in price over a month. On the upside, the share price will test short term resistance at around $124.81. On a downside, the stock is likely to find some support, which begins at $117.28. The failure to get near-term support could push it to $113.75.

It had seen a new analyst call from Stephens, which initiated the stock at Equal-Weight on December 06. Analysts at MKM Partners, started covering the stock on December 06 with a Buy rating. Analysts at Cowen, made their first call about the stock on November 30, recommending it is Outperform. Bernstein analysts came out with bullish views on November 01 when the call was made. They think the stock is now Outperform compared to to their prior call for Mkt Perform.

When looking at valuations, Concho Resources Inc. (CXO) has a pricey P/E of 34.01x as compared to industry average of 16.71x. Moreover, it trades for 18.72 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.32x price/book and 6.32x price/sales. Compared to others, Concho Resources Inc. is in a different league with regards to profitability, having net margins of 41.6%. To put some perspective around this, the industry’s average net margin is 6.89%. CXO’s ROE is 14.1%, which is also considerably better than the industry’s ROE of 6.89%. It’s also not liquid in the near term, with a current ratio of 0.5. The stock has a debt/capital of 0.25.

Shares of Concho Resources Inc. (CXO) have dropped -5.4% since the company’s last earnings report. Over the past 12 fiscal quarters, Concho Resources Inc. (NYSE:CXO) has topped consensus earnings estimates in 10 quarters (83%), missed earnings in 2 quarters (16%), whereas at 0 occasion EPS met analyst expectations. CXO last reported earnings on October 30, 2018 when it released Sep-18 results that exceeded expectations. The company raked in $1.42 per share, -95.8% change on the same period last year. That was better than consensus for $1.06. Revenue for the recent quarter stood at $1.19 billion, up 90% on last year and above the $1.1 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $1.14 billion to $1.43 billion, which should be compared with $828.79 million generated last year. EPS is seen in a range of $0.91 to $1.8, against the $0.63 reported a year ago.