Continental Tumbles to 52-Week Low: What’s Pulling it Down?

Shares of leading Bakken oil producer, Continental Resources, Inc. CLR, slipped to a 52-week low of $19.96 during Monday’s trading session. However, the stock recovered a tad and closed the session at $20.00 per share reflecting a negative year-to-date return of 47.9%. The trading volume for the session was 16.5 million shares.

What Led to the Share Price Decline?

Since the beginning of this month, shares of this Zacks Rank #3 (Hold) stock has been witnessing a downtrend. Continental Resources’ exposure to crude price volatility is resulting in its lackluster financials. As of now, crude prices are trading below the key psychological level of $35 a barrel after recently hitting a new seven-year low of $34.29. Crude is facing the heat on several fronts. The most troubling of all is perhaps the mounting worries about China’s crude demand. In particular, the nation’s currency devaluation has stoked speculation about soft economic growth in the world’s second-largest energy consumer.

Also, downward estimate revisions over the last 90 days added to Continental Resources woes. Analysts have become bearish on the company’s growth prospects, thereby leading to the fall in estimates. The Zacks Consensus Estimate for 2015 and 2016 also declined 23.5% and 128.1%, respectively. A persistent slide in oil prices is therefore a major concern for Continental Resources.

Oklahoma City-based Continental Resources is an independent exploration and production company focused on the Bakken play of North Dakota and Montana. The company also holds significant positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the STACK and Northwest Cana plays.

Stocks That Warrant a Look

Some better-ranked players in the energy sector are Energy Transfer Equity, L.P. ETE, Murphy USA Inc. MUSA and Boardwalk Pipeline Partners, LP BWP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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