Cabot Oil and Gas (COG) had a bullish 1H15. The stock crossed over both its 50-day and 200-day moving averages in April. It remained above these averages until July, which was also when its 50-day moving average was trading above its 200-day moving average, yet another bullish sign. From July onwards, COG started dropping, but its 50-day moving average didn’t cross under its 200-day moving average until late August. Since then, both COG stock and its 50-day moving average have fallen rapidly with COG barely managing to graze its 50-day moving average between October and November. On January 5, 2016, Cabot was trading ~7% below its 50-day moving average. From the below image, we can see that the gap between COG and its 50-day moving average is narrowing again.
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On January 5, 2016, COG was trading ~27% below its 200-day moving average.
COG’s stock started declining rapidly in the second half of 2015. This is because natural gas prices in the first half of the year were relatively stronger than they are now, albeit lower than they were last year. In the second half of the year, natural gas prices sank to a 16-year low of $1.76 per MMBtu (British thermal units in millions). This caused the gas-weighted company’s stock to fall to three-year lows of $15.35 on December 17. Year-over-year, COG’s stock has fallen by 41%.
Cabot Oil and Gas reported a 3Q15 adjusted net loss of $2.2 million. This compares to adjusted net income of $85 million in 3Q14.
Many upstream companies have been hit by weak crude and natural gas prices in 2015. Hess (HES) and Chesapeake Energy (CHK) recorded adjusted net losses of $291 million and $83 million, respectively, in 3Q15. Heavily hedged Devon Energy (DVN) reported a 3Q15 adjusted net income of $316 million. For a detailed overview of Chesapeake Energy, you can read Market Realist’s Will Chesapeake Energy Succumb to an Energy-Driven Debt Crisis?
These companies combined make up ~4.5% of the Energy Select Sector SPDR ETF (XLE). Next, we’ll take a look at Cabot Oil and Gas’s key management objectives.