Concho Resources Inc. (CXO): 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

Concho Resources ( CXO) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.8%. By the end of trading, Concho Resources fell $3.60 (-4.3%) to $80.14 on heavy volume. Throughout the day, 3,882,573 shares of Concho Resources exchanged hands as compared to its average daily volume of 1,065,200 shares. The stock ranged in price between $78.74-$82.55 after having opened the day at $82.55 as compared to the previous trading day's close of $83.74. Other companies within the Basic Materials sector that declined today were: Quaterra Resources ( QMM), down 20.4%, Great Basin Gold ( GBG), down 13.8%, James River Coal Company ( JRCC), down 9.9% and Halcon Resources ( HK), down 9.3%.
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Concho Resources Inc. operates as an independent oil and natural gas company in the United States. It engages in the acquisition, development, and exploration of oil and natural gas properties. The company principally operates in the Permian Basin region of southeast New Mexico and West Texas. Concho Resources has a market cap of $9.0 billion and is part of the energy industry. The company has a P/E ratio of 21.9, above the S&P 500 P/E ratio of 17.7. Shares are up 3.9% year to date as of the close of trading on Wednesday. Currently there are 16 analysts that rate Concho Resources a buy, no analysts rate it a sell, and 5 rate it a hold.

TheStreet Ratings rates Concho Resources as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

On the positive front, Crosshair Energy ( CXZ), down 23.3%, GeoPetro Resources Company ( GPR), down 20.0%, Rentech ( RTK), down 16.9% and OM Group ( OMG), down 16.0% , were all gainers within the basic materials sector with Anadarko Petroleum ( APC) 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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