Among top IBD 50 oil stocks, Matador Resources has formed a new entry after the stock successfully broke out from a cup base several weeks ago. As the energy play neared the profit zone from the breakout, shares formed a three-weeks-tight pattern that might allow investors to add shares to their winning positions.
Matador Resources is an independent exploration and production firm that explores for oil from various shale regions in North America. Most of Matador's assets and operations are located in the Delaware Basin in West Texas.
The firm is a significant player in the resource-rich Delaware Basin. This means it holds dibs on a substantial quantity of reserves and the potential for production growth.
A West Texas Exploration Powerhouse
According to MarketSmith, Matador Resources' 2022 EPS is expected to double from $4.25 in 2021 to $8.87 in 2022. Earnings had already made a huge jump in 2020 from 55 cents a share. At the end of 2021, Matador Resources was producing 87,300 barrels of oil and natural gas per day.
And according to the company's 2022 operations plan, released Feb. 22, Matador expects to be producing between 107,500 and 109,500 barrels per day shortly. "We believe that 2022 should again be rewarding for Matador and all of its stakeholders, as we continue developing our excellent Delaware Basin assets," said Joseph Foran, Matador's CEO.
Foran also said the company is "anticipating a number of key milestones in 2022, as we did in 2021, that are expected to add significant value, while also positioning Matador for continued growth and free cash flow in the coming years."
The company's recent reports show strong triple-digit growth in the top line and bottom line. In the fourth quarter of 2021, Matador's earnings were $1.26 per share on $566 billion in sales, according to MarketSmith chart analysis. Earnings skyrocketed 367% on a year-over-year basis while sales surged 153%. This represented a third straight quarter of at least triple-digit EPS and sales growth.
Matador stock also carries a three-year annual growth rate of 33%, which meets the minimum for CAN SLIM stocks. And that's impressive among oil stocks to watch now.
Oil Stocks Today: Matador Forms New Entry
Shares of Matador formed a three-weeks-tight pattern last week as shares closed tightly within a range for the third week in a row. Matador stock would now be actionable if the stock moves 10 cents above last week's high or above 57.79.
A move above this follow-on entry point would also mean the stock has reached the 20% profit zone from the recent breakout above a cup-base buy point at 47.33.
A leader among oil stocks that initially broke out in January, Matador has had a messy time following through on the breakout, with shares retreating to the 7% to 8% sell zone several times before finally becoming extended in March.
But, shares of Matador have remained above the 50-day line since the breakout, which is a bullish sign.
