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: Sometimes, life just isn't fair. To shareholders of Concho Resources
Not only that; Concho also beat on revenues, collecting 10% more than analysts had expected of it. The news looked so good, in fact, that when it first came out the stock gained 3% in after-hours trading. Talk about adding insult to injury …
So what: Why the reversal of thinking (and fortune)? Maybe this is my bias toward free cash flow-accounting talking, but I suspect that one thing that has investors doing a rethink is Concho's announcement that it plans to up its capital spending by 23% this year. When you consider that the company has already burned through more than $1.7 billion in negative free cash flow over the past year -- that it's in fact only generated positive free cash flow in one year out of the past five -- the prospect of dropping more cash down the oil well may not appeal to investors.
Will Concho Resources ever actually -- you know -- make money at its business? Add it to your watchlist, and find out.