NEW YORK (TheStreet) -- Shares of Continental Resources Inc. (CLR) are down 3.75% to $51.54 after CEO Harold Hamm stunned a bearish crude market by scrapping all of the company's hedges, in a bold bet that prices will recover soon after sliding some 25%, Reuters reports.
President of consultancy PKVerleger LLC Philip K. Verleger told Reuters that the independent crude oil and gas exploration, and production company's decision on hedging may concern investors.
"My expectation is that Continental's investors will rue this decision because it changes the firm's business," he said, adding, "Hedging provides an assured cash flow. By dropping the hedges the firm is gambling that prices go up. If they go down Continental will go bust."
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Separately, TheStreet Ratings team rates CONTINENTAL RESOURCES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CONTINENTAL RESOURCES INC (CLR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."