The company priced 6.5 million shares at $129 each and the stock immediately flew up to $131. He contrasts this with FireEye (FEYE) and other secondary offerings in the Internet space that have collapsed immediately. He says this means those stocks are under distribution and people do not want those offerings.
But Cramer says people clamor for anything oil-related, and Concho has a presence in the Permian Basin. Cramer calls this prime location "the great growth story going on right now" with 20% to 30% growth for companies in the Permian.
- The revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 32.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 40.5% when compared to the same quarter one year prior, rising from $75.29 million to $105.79 million.
- The gross profit margin for CONCHO RESOURCES INC is currently very high, coming in at 79.89%. Regardless of CXO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CXO's net profit margin of 16.73% significantly outperformed against the industry.
- Net operating cash flow has slightly increased to $417.38 million or 6.51% when compared to the same quarter last year. Despite an increase in cash flow, CONCHO RESOURCES INC's average is still marginally south of the industry average growth rate of 16.30%.
- Powered by its strong earnings growth of 29.48% and other important driving factors, this stock has surged by 58.43% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: CXO Ratings Report