Why Centennial Resource Development Dropped Nearly 7% in Early Trading Today
Shares of U.S. exploration and production (E&P) company Centennial Resource Development (NASDAQ: CDEV) fell nearly 7% in the first hour of trading on Sept. 29. There was no particular news out of the company, so investors were likely reacting to commodity prices. But there's a bit more to the story than just that.
Centennial is a relative small fry in the energy sector, with a market cap of only $170 million or so. It also has a material amount of debt, leaving it with a financial debt-to-equity ratio of roughly 4.5 times. That's not a particularly comforting number for any company, let alone a tiny one, so investors tend to react a bit more dramatically to the ups and downs of oil and natural gas. And in early trading today, oil is down and natural gas is down even more. Thus, it's not surprising that investors were a bit negative here today.
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Source Fool.com
