Cimarex Energy (XEC) is a Strong Buy - Aug 23

[dan_s]

Zacks Equity Research
Mon, August 23, 2021
Cimarex Energy (XEC) has been on a downward spiral lately with significant selling pressure. After declining 10.4% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.
XEC currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises.

XEC is trading at less than $60/share this morning. My valuation is $123/share.

XEC is going to merge into Cabot Oil & Gas (COG) in Q4. Post-Merger the company's name will change.
COG is almost a pure "gasser" that will have 2.4 Bcf per day of production in Q4 2021.
Only 30% of COG's Q4 natural gas is hedged at ~$3.00/MMBtu and NONE OF THEIR GAS IS HEDGED AFTER DECEMBER.
Post-Merger the new company's production mix should be approximately 74.0% natural gas, 12.4% NGLs and 13.6% crude oil.

My current valuation of COG is $31.00/share and XEC shareholders will get 4.0146 shares of COG per XEC share when the merger closes.
$31 X 4.0146 = $124.45

Read more: https://finance.yahoo.com/news/heres-wh ... 02743.html