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Jagged Peak (JAG) to Enter S&P SmallCap 600 Index This Month

Zacks Equity Research

Jagged Peak Energy Inc. JAG is expected to enter the S&P SmallCap 600 Index, replacing Northstar Realty Europe Corp. NRE, which will be acquired by private global asset manager, AXA Investment Managers. The replacement will likely be effective before the opening bell on Sep 30, 2019.

Jagged Peak has a market capitalization of more than $1.6 billion, which is within the index criteria of $600 million to $2.4 billion. It fulfils another criteria for entering the index, which requires a company to have the ratio of annual dollar value traded to float adjusted market capitalization at one or greater. It also meets the criteria of trading at least 250,000 shares in each of the past six months up to the date of evaluation.

Headquartered in Denver, CO, Jagged Peak is engaged in the exploration and production of oil and natural gas resources in the Southern Delaware Basin, a sub-basin of the broader Permian Basin. It will be incorporated in the S&P SmallCap 600 GICS Oil & Gas Exploration & Production Sub-Industry Index.

The fortunes of this upstream energy company have been greatly hurt by the commodity price volatility. With oil contributing more than 75% to production volumes, the energy explorer and producer has been affected by the current oil pricing scenario, wherein price of the commodity is struggling to go beyond the $60 per barrel mark. Oil price is unlikely to recover anytime soon as global energy demand will continue to remain weak. However, as the company employs advanced drilling technologies, fewer wellbores are required to be connected with more reservoir rocks. This can help Jagged Peak to keep drilling and completion expenses low, as well as improve profits.

Price Performance

Jagged Peak has lost 15.5% year to date compared with 14.4% decline of the industry it belongs to.

Zacks Rank and Stocks to Consider

Currently, Jagged Peak carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are National Oilwell Varco, Inc. NOV and Dril-Quip, Inc. DRQ, both having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

National Oilwell’s 2019 earnings per share are expected to rise 137.5% year over year.

Dril-Quip’s 2019 earnings per share are expected to rise 133.3% year over year.

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National Oilwell Varco, Inc. (NOV) : Free Stock Analysis Report
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