What Caught Our Attention in the Investment World? – Week of October 19-23, 2020

By Kuldip K. Ambastha

During this past trading week, the energy sector saw announcements of industry consolidation. ConocoPhillips (COP) will be buying Concho Resources Inc. (CXO) while Pioneer Natural Resources Company (PXD) will be buying Parsley Energy, Inc. (PE). ConocoPhillips will buy Concho Resources Inc. in an all-stock deal valued at $9.7 billion. Pioneer Natural Resources Company will buy Parsley Energy, Inc. in an all-stock deal valued at $4.5 billion.

Due to troubled and highly volatile current times in the oil & gas sector, companies are looking to cut costs and gain geographic advantages via merger and acquisition activities. Furthermore, investors are looking for value creation and higher returns, items which merger and acquisition activities can help with for energy companies.

The industry consolidation noted here will help with ConocoPhillips and Pioneer Natural Resources Company potentially profiting more from U.S. shale play exposure. All four companies had their worst daily return of the trading week on Wednesday, October 21, 2020. On that day of the trading week, the returns were as follows – ConocoPhillips: -6.0%, Concho Resources Inc.: -6.0%, Pioneer Natural Resources Company: -6.1%, and Parsley Energy, Inc.: -8.4%.

Keywords – ConocoPhillips, COP, Concho Resources Inc., CXO, Pioneer Natural Resources Company, PXD, Parsley Energy, Inc., PE, energy, oil, gas, shale, industry, consolidation, merger, acquisition, M&A.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in COP, CXO, PXD, and PE.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2020 – Ambastha Financial LLC.

Leave a Reply

Your email address will not be published. Required fields are marked *