Douglas E. Johnston
Long/short equity, hedge fund manager

EXCO Resources: Will This Dog Ever Have Its Day?

EXCO Resources (NYSE:XCO) is a pummeled stock. From being in the mid-$20s less than two years ago, it has drifted down to $6 per share of late. In mid-2011, management tried to buy the company out at a premium ($20.5) but was rejected for being too low of a price.

Wow! How times have changed. The big decline in natural gas prices, particularly the dry kind (methane), has hurt leveraged E&P companies like XCO. They've been saddled with poor earnings, little cash flow, and the need to raise capital. Chesapeake Energy (NYSE:CHK) is probably the poster child for the sector, but XCO has been a short sellers' paradise too. Just recently, the company had to sell...

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