why vanguard natural resources, cameron international, and peabody energy all skyrocketed this week
TRANSCRIPT
Why Vanguard Natural Resources, Cameron International, and Peabody Energy All
Skyrocketed This Week
It was another absolutely wild week in the market as the Dow opened the week down more than 1,000
points on Monday, only to recover by the end of the week. Meanwhile,
crude oil also enjoyed quite a recovery, as it bottomed out on
Monday below $38 a barrel, only to recover past $45 by Friday. This,
along with other news, led to some surging energy stock prices this
week.
Photo credit: TaxCredits.net
What:Coal producer Peabody Energy’s (NYSE: BTU) stock jumped more than 36% this
week.
So What: Key driver: A report by
Bloomberg that the company hired a bank to restructure its debt
Company currently has $6.3 billion in debt outstanding
Now What: Peabody is said to be
considering debt-for-equity swaps or convertible notes
Potential transactions would be handled outside of bankruptcy
Key takeaway: With bankruptcy seemingly off the table, short-sellers are covering, which is sending shares higher
What:Oil-field equipment-maker Cameron International (NYSE: CAM) leapt more than
48% this week.
So What: Key driver: Cameron to be
acquired by Schlumberger in a $14.8 billion cash-and-stock deal
Merger premium is 56.3% higher than the company’s stock was trading prior to the announcement
Now What: By combining, the companies
will be able to create the industry’s first complete drilling and production systems
Merger will drive significant deal synergies for Schlumberger, as well as deliver strong cost savings for its customers
Key takeaway: Investors like the deal and expect it to go through without any issues
What:Upstream MLP Vanguard Natural Resources (NASDAQ: VNR) rocketed more than
56% this week.
So What: Key driver: A significant surge
in oil prices drove all upstream MLPs higher, with Vanguard leading the way
Investors grew much more confident in the sector’s ability to weather the downturn now that oil prices have bottomed again and are starting to rally
Now What: Investors also are seeing that
Vanguard has been one of the more proactive upstream MLPs as it has already agreed to acquire two smaller rivals
Key takeaway: With fears abating, investors piled into badly beaten down upstream MLPs, like Vanguard
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