Noble Energy (NBL) is one of the leaders in the oil and gas exploration and production (E&P) sector. Like many of the other E&Ps, Noble Energy has had relatively sluggish share price lately. However, Noble Energy’s shares have taken a particularly large hit in the recent slump, and given their ever-growing asset base, I think they represent a special opportunity to investors.
Noble Energy is a buy for a 5-year investor without question. There are caveats for the 12-month investor. Wait for the stock to bottom out a little-it hasn’t yet and is still declining rather sharply. Commodity prices are at some of their lowest in the past 15 months, and I would wait for these to stabilize before initiating a position in Noble. That said, a bottom-out is imminent-and so is a breakout. Patience and vigilance are virtues for the 12-month investor, and Noble Energy shares are a strong buy at $85.
The price Noble Energy shares as of June 1 is about $81. Since May 1, when shares were trading for $100, the share price has plummeted to $82. In fact, the stock hit $100 twice after the October 2011 bottom-out. The 12-month range topped at $105 and bottomed at $66. As I note below, the company has strong long-term prospects, greater and more balanced than many of its peers.
Fundamental indicators are mixed regarding Noble’s price momentum for the short-term investor. The price/sales (TTM) ratio is around 3.88 for Noble Energy, which is higher than the sector’s upper quintile value of 0.60. To continue reading, click here.