Financial Advisors Focus on California Resources Corp (CRC) As Stock Follows U-Shaped Trajectory in August
August saw the US stock market extending their year-to-date gains. While the S&P 500 grew by just 2.96%, the Dow Jones Industrial Average and NASDAQ Composite appreciated by 4.94% and 4.19%, respectively. In this way, the NASDAQ Composite widened the performance gap. Since the beginning of the year, the NASDAQ Composite has surged by 14.60%, while the S&P 500 advanced by 7.45% and the Dow Jones Industrial Average is 4.94% in the green.
There is still uncertainty surrounding international trade and the August headlines were mostly dominated by US-China relations. However, the just-ended second-quarter earnings season and strong economic data helped offset investors’ concerns regarding trade. In the first half of the month, the markets were also affected by news from Turkey, which has plunged into an economic crisis that devalued its currency. There are still some concerns that the issues that Turkey is facing could spread to other economies in the region and even cause turmoil among emerging markets in general.
On the trade front, there were some signs that China and the US might reach an agreement. However, on August 23, a new round of tariffs affecting around $16 billion worth of Chinese imports kicked in, which prompted the Beijing government to retaliate. Since July, both countries slapped tariffs on goods worth a combined $100 billion.
August was also marked by some positive trade-related news. On August 27, US and Mexico reached a bilateral trade agreement that replaced the North America Free Trade Agreement. The highlights of the deal involve the automotive industry. The share of automobile content made in the US was increased to 75% from 62.5% and 40% to 45% of the content should be made by workers with a minimum wage of $16 per hour. The US still has to reach a trade agreement with Canada.
Another factor that put its strain on the stock market in August was the ongoing political turmoil surrounding President Trump. On August 21, Trump’s former campaign chairman Paul Manafort was convicted on eight counts, including false tax returns, bank fraud and failure to disclose foreign assets. In addition, on the same day, Trump’s former lawyer Michael Cohen made a plea deal and admitted to the violation of campaign finance law at the direction of Trump. The developments put some pressure on Trump and the GOP ahead of the midterm elections in November.
In the meantime, Financial Advisors in August focused more on smaller companies, leaving large corporations behind. For example, Apple Inc (NASDAQ:AAPL), which reached a capitalization of $1.0 trillion at the beginning of August, was the 18th most-searched ticker among Financial Advisors, according to TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors. Facebook Inc (NASDAQ:FB) ranked on the 19th spot. Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL), and Alibaba Group Holding Ltd (NYSE:BABA) ranked a bit higher, on the 9th, 11th, and 12th positions respectively.
At the same time, the list of the 20 most-searched tickers among Financial Advisors compiled by TrackStar was led by small-cap California Resources Corp (NYSE:CRC), followed by China Advanced Construction Materials Group Inc (NASDAQ:CADC), a nano-cap stock. On the third spot was Kinder Morgan Inc (NYSE:KMI). The fourth and fifth most-searched tickers last month were Israel-based Nice Ltd (ADR) (NASDAQ:NICE) and Exchange-Traded Fund United States Copper Index (NYSEARCA:CPER), respectively.
California Resources Corp (NYSE:CRC) caught the attention of Financial Advisors as its stock has surged by over 83% since the beginning of the year. The growth comes as oil prices appreciated by over 17% over the same period and are up by 40% over the past 52 weeks.
In August, California Resources Corp (NYSE:CRC) inched up by 4.45%. It’s worth noting that in the first half of the month, the stock plunged by 18%, but recovered in the following weeks. The decline in the first weeks of August came following the company’s second-quarter report.
California Resources Corp (NYSE:CRC) posted a net loss of $0.29 per share for the second quarter, beating the consensus estimate by $0.07, while its revenue of $549 million grew by 6% on the year, but missed the expectations by $62 million. In addition, the company’s second-quarter cash flow from operations amounted to $34 million.
During the earnings call, California Resources Corp (NYSE:CRC) said that the company’s assets have a reach that’s better than the one of its peers. As an example, CEO Todd A. Stevens pointed out California Resources’ 3P reserves, which include proven reserves, probable reserves and possible reserves, that are valued at over $1.64 billion and include 2.3 million net acres.
In addition, California Resources Corp (NYSE:CRC) has a long-term debt position of over $5 billion, but Stevens said that reducing debt is one of the company’s top priorities.
For the third quarter, California Resources Corp (NYSE:CRC) has provided a production outlook of 134,000 to 138,000 BOE per day, versus 134,000 BOE registered in the second quarter.
The drop registered by California Resources Corp (NYSE:CRC) following the second-quarter earnings suggests that the market was not satisfied with the results. However, as the stock lost over 18%, some investors considered the stock attractive enough and took advantage of the entry point, with the stock surging by over 27% between August 15 and August 28.