Sean Hannon

Why XTO Energy Is Overvalued

Today's price movement justifies my thesis. With a 5%+ move in oil (and natural gas higher on the week as well), XTO is slightly lower. I shorted the shares Monday morning at $41.85 so am currently sitting on a small profit. However, I will now be covering. Where XTO had refused to move lower with falling energy prices and was 2% overvalued versus my reserve value, I now see the shares 15% undervalued versus reserves given the large increase in energy prices. Having seen the market change, so will I and am currently covering my short position at market prices.