Why Is HighPeak Energy (HPK) Stock Up Today?

Today, HighPeak Energy (NASDAQ:HPK) stock is shooting up on a positive endorsement. Specifically, Jim Cramer thinks the mid-cap company could be a breakout amid the current oil boom. This week, oil and natural gas stocks have been on the rise, with oil prices surpassing $100 per barrel again. Although focus is often on the biggest names of the sector, Cramer thinks investors shouldn’t count HPK stock out. Given the company’s recent performance, it’s not hard to see why.

miniature oil barrel and oil well figures on top of stack of money
Source: Shutterstock

Cramer touted HighPeak’s potential among oil plays in his Tuesday morning CNBC broadcast. Today, HPK stock rose 14% in pre-market trading. Since this morning, it has also kept climbing. The stock is currently up more than 30% on the day and looks poised to continue its upward trajectory.

Here’s what investors should know about this oil play moving forward.

What’s Happening with HPK Stock?

Jim Cramer is an influential voice among investors. Recently, the host correctly predicted that Devon Energy (NYSE:DVN) was a good investment to guard against rising geopolitical tensions. In yesterday’s broadcast, Cramer also called HPK stock a good bet for those still bullish on the oil sector. He said the following:

“If you believe the price of oil can stay elevated here, possibly because the war in Ukraine will turn into a drawn-out stalemate, then you’ll likely get more upside out of an aggressive oil producer like HighPeak Energy.”

Of course, Cramer added that HighPeak’s “huge variable dividends” make it a riskier investment than Devon or Pioneer Natural Resources (NYSE:PXD). However, the host maintained that it was a worthwhile play nonetheless.

This type of endorsement puts HPK stock on the radar of many investors who might not have previously considered it. With a market capitalization of around $2.6 billion, the stock barely qualifies as mid cap. What’s more, investors tend to focus on larger oil producers — such as Exxon (NYSE:XOM) and Chevron (NYSE:CVX) — or much smaller-scale names like Imperial Petroleum (NASDAQ:IMPP) and Camber Energy (NYSEMKT:CEI).

Today, HPK stock may be surging on Cramer’s endorsement, but it has been climbing steadily since the start of the oil boom. The stock is up more than 34% for the past one month and more than 90% year-to-date (YTD). However, the company has received little coverage until now. On TipRanks, only two analysts have issued ratings for HPK stock — and it has been months since either have revisited their price targets.

What It Means

All told, Jim Cramer has highlighted HighPeak Energy at a critical time. Investors are seeking out new plays amid rising oil prices. The problem HPK stock has been facing isn’t that investors don’t believe in oil. Rather, it has been overshadowed by larger competitors. Now, though, investors will likely see it as a worthwhile play after being brought to their attention.

With geopolitical tensions still escalating, oil prices are unlikely to drop off. HighPeak has plenty of room to grow. Looking forward, investors should be watching HPK before it rises even further.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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