Marathon Oil (MRO: 26.32, -0.48, -1.79%) was trading down on above-average volume with 11.2 million shares moving, or 1.6 its average daily volume. With a closing price of $26.34, shares were down 1.7%. The stock has been on a downward trajectory over the last two months, sliding $7.19 (-21.4%) from a price of $33.53 on March 8, 2012. The stock is trading at 86.4% of its 50-day moving average and 87.9% of its 200-day moving average.
Says it all really. This goes well beyond what has happened to peers, commodity price and the broader market. Its a liquids company so the NG factor is not big. The volumes and the size of this move suggests some major holders have or are getting out. And the question remains why?
Peers are very comparable. APA is trading closer to its 52-week lows than MRO, and it's a very comparable company. CHK is in the dumps, though that's partly because of company-specific issues. APC is also near 52-week lows.
Amongst the APA and APC comparison, MRO had a slightly stronger ride up in early 2012. That was probably because of Libya and analyst enthusiasm (like the Merrill Lynch recommendation for instance). In contrast, APA has a lot of Egypt holdings, and traders are very pessimistic about that.
Mid-sized diversified exploration companies are faring similarly. APA, APC, and MRO are very similar companies. MRO trades at the best PE among them, AND carries the best dividend, so it's my current favorite.
What I don't really understand is why the megas--XOM most particularly--have fared so well. I'm a bottom feeder, and snagged XOM a year and a half ago in the $50's, sold it around $80 a year ago or so. Between then and now, as nat gas prices have tanked (XOM has the largest nat gas holdings in the world) and the world economy puts downward pressure on oil speculation, I'd expect XOM's shares to be more affordable. But of course, they're trading within 5% of their 52-week highs.
My call on it is to go where the buying's cheap. I'm wrong plenty of time, so make your own decision. But I have no worries about long-term prospects for MRO, and the dividend will tide me over til it recovers.
Keep a good, diversified portfolio with 10+ stocks of MRO caliber and buying at points like this when they are beaten down in share price. 2-3 of the 10 (4 if you're really unlucky) will continue to sink for whatever reason. The others will rebound, and overall, you'll profit.