Continental Resources Inc (CLR): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Continental Resources ( CLR) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.2%. By the end of trading, Continental Resources fell $1.06 (-1.4%) to $77.54 on light volume. Throughout the day, 727,383 shares of Continental Resources exchanged hands as compared to its average daily volume of 1.2 million shares. The stock ranged in price between $76.25-$78.86 after having opened the day at $78.11 as compared to the previous trading day's close of $78.60. Other companies within the Basic Materials sector that declined today were: Cardero Resources Corporation ( CDY), down 9.2%, Timberline Resources Corporation ( TLR), down 8.7%, Minco Gold Corporation ( MGH), down 8.6%, and Houston American Energy Corporation ( HUSA), down 8%.
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Continental Resources, Inc. engages in the exploration, development, and production of crude oil and natural gas primarily in the north, south, and east regions of the United States. Continental Resources has a market cap of $14.25 billion and is part of the energy industry. The company has a P/E ratio of 17.6, below the average energy industry P/E ratio of 17.8 and equal to the S&P 500 P/E ratio of 17.7. Shares are up 17.8% year to date as of the close of trading on Friday. Currently there are 10 analysts that rate Continental Resources a buy, no analysts rate it a sell, and eight rate it a hold.

TheStreet Ratings rates Continental Resources as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

On the positive front, Lizhan Environmental ( LZEN), up 44%, James River Coal Company ( JRCC), up 23.2%, Yongye International ( YONG), up 17.1%, and GeoGlobal Resources ( GGR), up 15.7%, were all gainers within the basic materials sector with Pioneer Natural Resources Company ( PXD) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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