Pioneer Natural Resources (PXD)
From Cabot Wealth Advisory 9/12/13 Sign up for free Cabot Wealth Advisory
One area that hasn’t been in the public’s eye but seems to be emerging is the energy group. I know what you’re probably thinking—aren’t oil stocks just getting a lift because oil prices have been up during this Syria uncertainty? Maybe, but I saw many names in the group act well even when oil prices dipped this week.
One of the best acting stocks is Pioneer Natural Resources (PXD), which I wrote about in Cabot Top Ten Trader back on August 5:
“Pioneer Natural Resources is a good-sized energy explorer that's operating in two of the more exciting plays in the U.S.—the Wolfcamp/Spraberry area, which is one of the largest oil fields in the entire world, and the emerging Eagle Ford Shale, which is liquids-rich and could end up being the most lucrative shale play in all of the U.S. Pioneer's total production this year is expected to grow "only" 14% to 16%, but investors are focused on the company's activity in these two areas and liking what they see. In the Wolfcamp/Spraberry play, production increased 7% sequentially in the second quarter as the company moves more of its drilling to horizontal from vertical; this production was strong especially as some output was "rejected" because of low prices. In the Eagle Ford Shale, output was up only a smidge in the second quarter, but should grow 35% to 50% for all of 2013 as Pioneer ramps up the number of wells it's tapping. Also of note are advancements like pad drilling and cheaper propants, which are saving hundreds of thousands of dollars per well. Obviously, a collapse in oil or liquids prices would be bad, but analysts see earnings up 42% this year (to about $4.90 per share) and another 26% in 2014. It looks like an emerging blue-chip in the energy sector.”
Since that time, PXD pulled back for a couple of weeks with the market, dipping from 183 to 166, then rallied back to that old peak before a small retreat this week. I think the stock’s a good buy around here, with a stop near 165 in case things go awry. If the oil group is starting a new uptrend, PXD should be one of the leaders.
Get more updates on PXD as well as additional growth stock recommended in Cabot Top Ten Trader, by clicking here.
|Pioneer Natural Resources (PXD)
5205 North O
Irving, Texas 75039
|Index Membership: N/A
Sector: Basic Materials
Industry: Independent Oil & Gas
Full Time Employees: 3,667