Kosmos Energy (NYSE:KOS) Shares Gap Down - Should You Sell?

Key Points

• Kosmos Energy shares fell from a $3.09 close to about $2.97, below the company’s $2.63 50-day and $2.66 200-day moving averages.
• Analyst sentiment remains cautious: the stock has an average “Reduce” rating, with four Sell, three Hold, and two Buy ratings, and an average price target of $2.53.
• Kosmos exceeded quarterly earnings and revenue expectations, but it still reported a negative net margin and return on equity, while its debt-to-equity ratio stood at a high 3.58.

Kosmos Energy Ltd. (NYSE:KOS - Get Free Report) shares gapped down prior to trading on Wednesday . The stock had previously closed at $3.09, but opened at $2.98. Kosmos Energy shares last traded at $2.97, with a volume of 1,227,501 shares traded.

Analyst Upgrades and Downgrades

KOS has been the topic of several research reports. Royal Bank Of Canada lowered shares of Kosmos Energy to a "neutral" rating in a report on Wednesday, May 27th. Wall Street Zen raised Kosmos Energy from a "buy" rating to a "strong-buy" rating in a research report on Saturday, September 5th. Stephens cut their price target on Kosmos Energy from $3.00 to $2.40 and set an "equal weight" rating on the stock in a report on Tuesday, July 21st. Weiss Ratings reissued a "sell (d-)" rating on shares of Kosmos Energy in a research report on Monday, August 3rd. Finally, Mizuho raised Kosmos Energy to a "strong sell" rating in a research report on Friday, July 31st. Two analysts have rated the stock with a Buy rating, three have issued a Hold rating and four have issued a Sell rating to the company. According to MarketBeat, Kosmos Energy currently has an average rating of "Reduce" and an average target price of $2.53.

Kosmos Energy Stock Performance

The business's 50-day moving average price is $2.63 and its 200-day moving average price is $2.66. The company has a current ratio of 0.59, a quick ratio of 0.38 and a debt-to-equity ratio of 3.58. The stock has a market cap of $1.74 billion, a PE ratio of -2.46, a P/E/G ratio of 0.19 and a beta of 0.73.

Kosmos Energy (NYSE:KOS - Get Free Report) last posted its quarterly earnings data on Monday, August 3rd. The oil and gas producer reported $0.11 EPS for the quarter, topping the consensus estimate of $0.09 by $0.02. Kosmos Energy had a negative net margin of 33.98% and a negative return on equity of 17.73%. The firm had revenue of $607.25 million during the quarter, compared to analyst estimates of $483.23 million. As a group, equities research analysts expect that Kosmos Energy Ltd. will post 0.51 earnings per share for the current fiscal year.

Insider Activity

In related news, CEO Andrew G. Inglis sold 85,935 shares of the company's stock in a transaction dated Thursday, July 2nd. The stock was sold at an average price of $2.05, for a total transaction of $176,166.75. Following the transaction, the chief executive officer directly owned 4,678,043 shares of the company's stock, valued at $9,589,988.15. This represents a 1.80% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, SVP Josh R. Marion sold 24,969 shares of the stock in a transaction dated Thursday, July 2nd. The shares were sold at an average price of $2.05, for a total value of $51,186.45. Following the completion of the sale, the senior vice president owned 233,404 shares of the company's stock, valued at approximately $478,478.20. This trade represents a 9.66% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last quarter, insiders sold 169,012 shares of company stock worth $346,475. Insiders own 1.90% of the company's stock.

Hedge Funds Weigh In On Kosmos Energy

Hedge funds have recently modified their holdings of the stock. Swiss Life Asset Management Ltd grew its stake in shares of Kosmos Energy by 12.2% during the second quarter. Swiss Life Asset Management Ltd now owns 38,893 shares of the oil and gas producer's stock worth $82,000 after purchasing an additional 4,215 shares in the last quarter. Public Employees Retirement System of Ohio raised its stake in Kosmos Energy by 10.2% in the first quarter. Public Employees Retirement System of Ohio now owns 46,938 shares of the oil and gas producer's stock valued at $130,000 after buying an additional 4,361 shares in the last quarter. GTS Securities LLC lifted its holdings in Kosmos Energy by 23.8% during the 2nd quarter. GTS Securities LLC now owns 28,584 shares of the oil and gas producer's stock worth $60,000 after buying an additional 5,499 shares during the last quarter. Pictet Asset Management Holding SA lifted its holdings in Kosmos Energy by 7.8% during the 2nd quarter. Pictet Asset Management Holding SA now owns 93,441 shares of the oil and gas producer's stock worth $197,000 after buying an additional 6,757 shares during the last quarter. Finally, SmartHarvest Portfolios LLC boosted its position in shares of Kosmos Energy by 73.0% during the 1st quarter. SmartHarvest Portfolios LLC now owns 23,814 shares of the oil and gas producer's stock worth $66,000 after acquiring an additional 10,050 shares in the last quarter. Institutional investors and hedge funds own 95.33% of the company's stock.

About Kosmos Energy

Kosmos Energy Ltd. is an independent oil and gas exploration and production company headquartered in Dallas, Texas. The company focuses on finding, developing and producing oil and natural gas resources, with an emphasis on offshore assets in emerging and established energy regions.

Kosmos has historically concentrated its operations along the Atlantic margins of West Africa, including interests in Ghana, Equatorial Guinea and the waters offshore Mauritania and Senegal. Its activities have included exploration, field development and production of crude oil and natural gas, as well as participation in projects designed to supply natural gas for liquefied natural gas (LNG) production and domestic markets.

Founded in 2003, Kosmos was involved in the discovery and development of major petroleum resources offshore Ghana, including the Jubilee and TEN fields.

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