The Case for and Against SM Energy Company (SM)

SM Energy Company (SM) is an interesting player in the Basic Materials space, with a focus on Independent Oil & Gas. The stock has been active on the tape, currently trading at $21.43, up from yesterday’s close by 4.69%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

SM Energy Company (SM) currently trades with a market capitalization of $2.45 Billion. That value represents a market adjusting for revenues that have been falling by -9.99 % on a quarterly year/year basis as of the company’s last quarterly report.

You can get a sense of how sustainable that is by a levered free cash flow of -$2.5 Billion over the past twelve months. Generally speaking, earnings are expected to grow in coming quarters. Analysts are forecasting earnings of -$0.14 on a per share basis this quarter. Perhaps, that suggests something about why 2.35% of the outstanding share supply is held by institutional investors.

Technical Analysis

No analysis is ever complete without a thorough survey of a stock’s technical behavior. Looking at the stock’s movement on the chart, SM Energy Company recorded a 52-week high of $28.63. It is now trading 7.2% off that level. The stock is trading $23.21 its 50-day moving average by 1.78%. The stock carved out a 52-week low down at $12.29.

In recent action, SM Energy Company (SM) has made a move of -19.50% over the past month, which has come on weak relative transaction volume. Over the trailing year, the stock is underperforming the S&P 500 by 13.35, and it’s gotten there by action that has been more volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 16.78% with $102.50 Million sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of SM.

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