Noble Energy (NBL) Hits 52-Week High on Asset Sale Strategy
Shares of Noble Energy, Inc. NBL scaled a new 52-week high of $40.38 on Dec 5 and closed at $39.50. Over the past 52 weeks, Noble Energy’s shares have ranged from a low of $23.77 on Jan 20, 2016 to a high of $40.38 on Dec 5, 2016. The average volume of shares traded over the last three months is approximately 3.7 million.
What’s Driving the Stock?
Noble Energy is focused on monetizing its non-core assets to improve liquidity. The company has monetized assets worth $2.5 billion over the last four years and expects divestment proceeds of $1.5 billion in 2016. Moreover, it expects to close the divestiture of a 3% stake in the Tamar asset in the fourth quarter.
Further, Noble Energy exited the third quarter with liquidity of $5.8 billion. An improved liquidity profile, supported by systematic and prudent asset sales, will enable the company to pay down its debt by the year end, lower its underlying cost structure and strengthen its balance sheet. Noble Energy believes that in lieu of organically generated free cash flow and divestment proceeds, it will have over $5 billion of liquidity at the end of the year.
Price Movement
The company’s stock has surged about 22.8% this year, outperforming the S&P 500 Composite Market average of 5.1% in the last 12 months.
Solid production from Noble Energy’s organic and inorganic assets, cost reduction and higher demand from both international and domestic assets is driving its performance.
Noble Energy expects its overall portfolio to grow at the rate of 8–12% compounded annually, which is internally funded and generated by existing assets in the U.S. onshore and Eastern Mediterranean. Further, Noble Energy’s returns-based, capital-efficient business model supports its growth going forward.
Zacks Rank & Other Key Picks
Nobel Energy currently has a Zacks Rank #2 (Buy). A few other favorably placed stocks in the same space include Diamondback Energy, Inc. FANG, Newfield Exploration Company NFX andDenbury Resources Inc. DNR.
Diamondback Energy delivered an average positive earnings surprise of 74.13% in the trailing four quarters.The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Newfield Exploration, another Zacks Rank #1 stock, recorded an average positive earnings surprise of whopping 754.83% in the trailing three quarters.
Denbury Resources recorded an average positive earnings surprise of 283.33% in the trailing three quarters. The company carries a Zacks Rank #2 (Buy).
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