Contango Story

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MCF -- USA Stock  

USD 3.58  0.11  2.98%

It looks like Earthstone Energy will continue to recover faster as its price went down 3.75% today to Contango Oil's 1.61%. As many rational traders are trying to avoid energy space, it makes sense to digest Contango Oil Gas a little further and understand how it stands against Earthstone Energy and other similar entities. We are going to discuss some of the competitive aspects of both Contango and Earthstone.
Published over a month ago
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What should I acquire Earthstone (NYSE:ESTE) or Contango (NYSEMKT:MCF)?
By analyzing existing fundamental indicators between Contango Oil and Earthstone, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Earthstone with a short position in Contango Oil. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Contango Oil has an asset utilization ratio of 233.32 percent. This indicates that the company is making $2.33 for each dollar of assets. An increasing asset utilization means that Contango Oil Gas is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Contango or Dorchester is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Contango Oil's Liquidity

Contango Oil financial leverage refers to using borrowed capital as a funding source to finance Contango Oil Gas ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Contango Oil financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Contango Oil's total debt and its cash.

Correlation Between Contango and Dorchester Minls

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Contango Oil together with similar or unrelated positions with a negative correlation. For example, you can also add Dorchester Minls to your portfolio. If Dorchester Minls is not perfectly correlated to Contango Oil it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Contango Oil for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Please check pair correlation details between MCF and DMLP for more information.

Is Contango Oil valued correctly by the market?

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now take a look at Contango Oil revenue. Based on the latest financial disclosure, Contango Oil Gas reported 120.95 M of revenue. This is 99.75% lower than that of the Energy sector and 96.32% lower than that of the Oil & Gas E&P industry. The revenue for all United States stocks is 98.72% higher than that of Contango Oil. As for Earthstone Energy we see revenue of 174.64 M, which is 94.69% lower than that of the Oil & Gas E&P

Sector
3.3 B
MCF120.95 Million3.37
Sector3.29 Billion91.75
ESTE174.64 Million4.87

Will Contango price dip impact its balance sheet?

Value At Risk just dropped to -6.54, may indicate upcoming price depreciation. Contango Oil Gas is displaying above-average volatility over the selected time horizon. Investors should scrutinize Contango Oil Gas independently to ensure intended market timing strategies are aligned with expectations about Contango Oil volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Contango Oil's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Contango Oil's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Although some firms in the oil & gas e&p industry are either recovering or due for a correction, Contango Oil may not be performing as strong as the other in terms of long-term growth potentials. To conclude, as of the 10th of March 2021, we see that Contango Oil moves completely opposite to the market. The firm is overvalued with below average probability of financial unrest within the next 24 months. Our up-to-date 30 days buy-hold-sell advice on the firm is Strong Sell.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Contango Oil Gas. Please refer to our Terms of Use for any information regarding our disclosure principles.

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