Devon Energy (DVN) — This is one of the United States’ largest independent oil and gas exploration and production companies. The stock has been hammered down to $58.17 from a high over $80 in late June. Despite the 28% decline, analysts anticipate strong projected earnings growth for the next two years.
S&P Capital IQ estimates operating earnings of $5.85 per share in 2014, up from a loss of $0.06 in 2013. And it projects another increase to $6.53 in 2015. Its analysts have a 12-month target of $83 based on the company’s transition to an onshore E&P company with a focus on liquids production.
In June, Bank of America (BAC) resumed coverage of the company with a “buy” rating and price target of $100.
I seldom illustrate the Trade of the Day with two charts. However, adding the weekly chart shows that DVN is a bottom fisher’s delight. It has bounced from the current level several times in the past three years.
Note the strong buying last week after what appears to be a selling climax at a price range that proved to be historical lows in 2011 through 2013. MACD is curling up.
Buy DVN at the market for a trading target of $68. Long-term investors should buy and hold for a target of $100. The company pays an annual dividend of $0.96 for a forward yield of 1.7%.
