This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Pioneer Natural Resources May Be a Good Stock, but Not at This Price

(This an update from a story published Thursday at 11:58 a.m. EDT. This version adds details about Pioneer's production estimates in the second paragraph and in the last two paragraphs.)

NEW YORK (TheStreet) -- Pioneer Natural Resources (PXD - Get Report) is eyeing a bright future in oil production growth, but it is an expensive stock.

Pioneer is the biggest player at the Spraberry and Wolfcamp shale rock formations, which are located in the Permian Basin in the western part of Texas. The area is one of the most prolific oil-producing regions in the U.S. The company’s core reserve base could more than double by 2016, while its output, which has been increasing at an accelerated pace, could double by 2018 from its output in 2013.

The company also stands to benefit from a recent Commerce Department ruling that will allow it to export a kind of oil known as condensates. Pioneer is the only company, besides Enterprise Products Partners (EPD) that received this permission. The U.S. has banned the export of unrefined oil since the 1970s.

Every Which Way But Short

Here's the Biggest Takeway From Facebook's Blowout Earnings

The Story Behind Sarepta's Firing of Its Top Scientist

Exporting some oil will allow Pioneer to tap into international markets where oil prices carry a premium of up to $20 a barrel over domestic crude prices. The higher prices can give a boost to Pioneer's profits in the future.

Shares of Pioneer, however, are trading close to its 52-week high of $234. Through Wednesday's close, they have risen 27.6% this year, outpacing the S&P 500 Index.

By one measure, the stock is trading at about twice the average of other energy companies operating in the Permian Basin, such as Chevron (CVX), Cimarex Energy (XEC), Exxon Mobil (XOM) and Occidental Petroleum (OXY).

So investors may want to wait for a pullback before getting into Pioneer.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
PXD $126.77 0.00%
AAPL $121.30 0.00%
FB $94.01 0.00%
GOOG $625.61 0.00%
TSLA $266.15 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs