Why Shares of Endeavour International Corporation Plunged Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of energy explorer Endeavour International Corporation (NASDAQOTH: ENDRQ  ) fell 22% today after reporting earnings.

So what: Fourth-quarter sales volumes rose 18%, to 13,648 barrels of oil equivalent per day, and revenue was up 20%, to $116.9 million, ahead of estimates. But net loss more than quadrupled, to $28.1 million, or $0.60 per share, far worse than the $0.33 loss that analysts expected. 

Now what: The loss is concerning, and so is $871 million in long-term debt, which could strangle the company if operations don't improve more quickly. I'm always leery of companies with high debt that can't grow profitably, because that can lead to the forced selling of valuable assets in the future. I just don't see a lot of positive trends for Endeavour International, and will stay out of the stock today.

A stock to keep an eye on in energy
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!


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