Tuesday, June 21, 2011

Today's M^3 - Cabot Oil and Gas (COG) Gains 13% in Past Month

The Major Market Move being discussed today involves a US equity, Cabot Oil and Gas, which has been one of the top performers in the S&P over the last 30 days. It's up over 13% since 5/20:

There are only 2 other stocks that are performing better over that time frame: ProLogis (PLD) which was boosted by its merger with AMB Property Corp, and Forest Laboratories (FRX), where the news became public that Carl Icahn was gobbling up shares. The gains in COG are interesting in that it is predominately a natural gas company, despite the name. According to the last quarterly report, over 90% of their revenues were from natural gas. One would expect their stock performance to track the price of Nat Gas fairly closely, but that hasn't been the case.

Natural Gas Futures:

COG stock price:

Nat Gas prices are essentially flat for the year while COG has been on a tear, up 63% for 2011. From an earnings perspective, it looks like most of the run up is due to a big beat in calendar Q4 2010. The stock price continued the strong trend upwards despite the mediocre Q1 of 2011. Q2 of 2011 will be pivotal in determining if that trend upwards was warranted.

(Click on the images for a larger view.
Click here for the current stock performance of the S&P 500.
Click here for the current chart of Natural Gas Futures.
Click here for COG EPS actuals and estimates.

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