Laredo Petroleum Inc (NYSE:LPI) is one company that is going through painful adjustments. Recently, there were reports of insider trading at the company which really hurt investor sentiment. Also, The GV Times reports that Warburg Pincus Private Equity divested “over 12 million Laredo Petroleum shares for around a little over $99 million.” Reportedly, this negatively impacted the price of the company’s shares.
“Laredo Petroleum, Inc. (LPI) trading activity significantly weakened as the volume at ready counter decreased to 2,339,009 shares versus 6,057,133 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 4,215,833 shares,” GV Times adds.
Challenging period for Laredo Petroleum shares
Seemingly, the consensus is that Laredo Petroleum (LPI) is among the worst performing oil stocks at the moment. According to the latest earning report, the company has earnings per share (EPS) less than the market average.
Data cited by analysts indicate that for the three-month period leading to the last report, the firm posted $0.25 EPS. Incidentally, the data misses a previous consensus which put the estimates EPS at between $0.29 and $0.04. Also in the earnings report, LPI reported revenue of $351.05 million for Q3 of 2018. Interestingly, this figure surpasses the estimated forecast of around $214.15 million.
LPI might not be a bad company after all. Seeking Alpha notes that could post meaningful earnings in future. It adds that although this is generally a good year for oil stocks, LPI encountered external disruptions. Particularly, the termination of transaction contract with Royal Dutch Shell hit LPI really hard. Without contact with Shell, LPI could no longer access the high prices it used to capture.
Naturally, after such announcements, the market reacts. This time, they panicked due to fears regarding the company’s future earnings and liquidity. Further, weakening of oil prices in the Permian Basin also hurt the company.
However, there is visble change in the trend of LPI share trade volumes. In the last five consecutive trading sessions, LPI stock returned 7.22%. With positive moving average (MA) and favourable average true range (ATR), Laredo Petroleum shares are worth buying.