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Cramer's Lightning Round: Devon Energy is a buy
  + stars: | 2024-01-31 | by ( Julie Coleman | ) www.cnbc.com   time to read: 1 min
Stock Chart Icon Stock chart icon Devon Energy's year-to-date stock performance. Devon Energy : "It's too low...$40, buy Devon [buy, buy, buy!]." Stock Chart Icon Stock chart icon Super Group's year-to-date stock performance. Stock Chart Icon Stock chart icon Simpson Manufacturing's year-to-date stock performance. Stock Chart Icon Stock chart icon Starwood Property Trust's year-to-day stock performance.
Persons: Devon Energy's, Simpson, they're, Sternlicht, Woodward Organizations: Devon, Devon Energy, Super, Simpson, Starwood, Starwood Property Locations: Devon
Stock Chart Icon Stock chart icon Devon Energy's year-to-date stock performance. Stock Chart Icon Stock chart icon Fiverr's year-to-date stock performance. Stock Chart Icon Stock chart icon Transmedics' year-to-date stock performance. Stock Chart Icon Stock chart icon Boston Scientific's year-to-date stock performance. Stock Chart Icon Stock chart icon Paramount's year-to-date stock performance.
Persons: Devon Energy's, it's, Transmedics, You've Organizations: Devon, Devon Energy, Boston, Uranium Energy, Paramount
Stock Chart Icon Stock chart icon Nvidia's stock performance year to date. Stock Chart Icon Stock chart icon Meta's stock performance year to date. Stock Chart Icon Stock chart icon Devon Energy's stock performance year to date. Stock Chart Icon Stock chart icon Johnson & Johnson's stock performance year to date. Stock Chart Icon Stock chart icon Honeywell's year to date stock performance.
Four Club holdings — including Meta Platforms (META) and Pioneer Natural Resources (PXD) — are among the 12 best-positioned stocks right now, investment bank Bernstein told clients Wednesday. A third characteristic shared by all 12 stock is not being a so-called "crowded trade," as measured by Bernstein's Crowding Model. Meta Platforms Bernstein's take: Meta's aggressive cost-cutting efforts are likely factored into the social media giant's stock price in full, according to the firm. Pioneer Natural Resources Bernstein's take: Pioneer has "the simplest and most reliable" operating model within the energy sector, analysts wrote. Devon Energy Bernstein's take: The firm sees Devon as the best "turnaround story" in the U.S. shale sector, noting that past performance has sometimes been "marred by shaky strategic decisions."
Shares of Club holding Devon Energy (DVN) fell sharply Wednesday, one day after delivering disappointing fourth quarter results , reducing its fixed-plus-variable dividend and barely buying back any stock. DVN 1Y mountain Devon Energy (DVN) 1-year performance Devon management on Wednseday did reassure investors of its commitment to financial discipline and shareholder returns. Production guidance On Devon's earnings call Wednesday morning, management said that the first quarter is expected to be the lowest production quarter of fiscal 2023. The facility is expected to be back up and running by mid-March, with no impact to second quarter production expected. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.
Oil-and-gas producer Devon Energy (DVN) on Tuesday delivered lackluster fourth-quarter earnings, sending shares lower. Note : Devon Energy is scheduled to host its post-earnings conference call on Wednesday at 11:00 a.m. Bottom line This was a disappointing quarter for Devon Energy, despite having managed our expectations given the recent decline in energy prices. As a result, Devon stock tumbled roughly 5.5% in afterhours trading, as shares re-rated to the lower cash-return profile. As was the case in the prior quarter, Devon did not aggressively make use of its $2 billion share repurchase program in the fourth quarter.
We then divided that by each company's average market capitalization throughout that same time period. These 10 stocks spent the most on buybacks in their latest full fiscal year relative to their average market capitalization over that same four-quarter period. Devon Energy's stock ended Tuesday at $61.98 per share, giving the company a market cap of $40.52 billion. As of Sept. 30, the company had $43.5 billion remaining on its $70 billion buyback program, which was authorized by the board in April. As of Sept. 30, Linde had $6 billion left on its $10 billion buyback authorization approved by its board in February.
3Q cash flow Operating cash flow for the quarter increased 32% year-over-year, to $2.1 billion, roughly in line with analysts' estimates of $2.18 billion. Free cash flow grew 31% annually, to $1.48 billion, in line with forecasts of $1.45 billion. Capital allocation At the Club, we pay close attention to cash flow metrics. The strong cash flow realized in the third quarter allowed management to announce a fixed-plus-variable dividend of $1.35 a share. Free cash flow is expected to increase more than 25% on an annual basis.
The solution: The best investors do both — maintain a long view while also focusing on the shorter term. For the sake of this exercise, let's consider one end of the barbell to be the "long-term view," and on the other the "short-term focus." Long-term view stocks First the long-term view: These stocks will be the more passively managed names and identifying them is what will free us up to focus on those that require more active management. As a result, the long-term view beats the near-term dynamics. With the earnings serving to confirm our long-term view, we took a shot at around the $2,600 level — $2,628.56 to be exact.
Top-down analysis As the name implies, top-down analysis starts by analyzing the big picture and working your way down. The industrials offers another great example of how a top-down analysis may work. Bottom-up analysis Bottom-up analysis works in the opposite direction. By combining the top-down view with the bottom-up view, the hope is to identify "great houses, in great neighborhoods." As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.
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