Energy Stocks to Sell: Cabot Oil & Gas (COG)
The sheer abundance of natural gas in Pennsylvania’s Marcellus shale has made early investors quite a fortune. It has also made for some expensive energy stocks as well.
Take Cabot Oil & Gas (COG) for example. The natural gas player current trades for a P/E of 52 and forward P/E of nearly 20. And 52 times earnings is quite expensive for some of the issues at COG.
Cabot is sitting on an ocean of Marcellus natural gas. The problem is that the lack of infrastructure is making it tough for COG to sell that fuel. More importantly, that problem is preventing Cabot from selling what it can at good prices. And considering that the cold winter has driven up natural gas prices to very profitable numbers, this fact is very troubling for COG shares. Especially when investors are pricing a huge amount of growth in the firm.
While the infrastructure issues will eventually subside, it’ll take plenty of time for these pipelines and gather systems to be built. Until then, COG represent one of the most pricy energy stocks for investors in the Marcellus.
It might be time to move to greener pastures.