We’re buying 25 shares of Pioneer Natural Resources (PXD) at roughly $185 each. Following Monday’s trade, Jim Cramer’s Charitable Trust will own 175 shares of PXD, increasing its weighting in the portfolio to 1.26% about from 1.09%. With oil prices and energy stocks under pressure in recent weeks — and the stock market in deep oversold territory, with the S & P 500 Short Range Oscillator at minus 8.89% — we’re again building up our position in oil-and-gas firm Pioneer Natural Resources . The stock has come down more than 6% since our last buy a week ago, which represented a repurchase of one-third of the shares we had sold a month prior. With this buy, we’re adding back another third, while leaving additional room for another purchase, should the weakness in energy continue. The price of West Texas Intermediate (WTI) crude — the U.S. oil benchmark — has come down roughly 14% since the start of the year, to around $66 a barrel. Given Pioneer’s low breakeven at $39 per barrel of WTI, the company can still generate an attractive return at current levels. Pioneer management recently noted that even with WTI at $60 a barrel, the company would expect to generate roughly $3 billion in annual free cash flow and pay out about $11 per share in dividends. Based on today’s $185 share price, that amounts to a roughly 6% dividend yield before the benefit of any share repurchase activity – a yield that would prove much higher should WTI rebound from current levels. Oil prices could stage a rebound later in the year as China’s economy continues to reopen and demand for crude picks up. While the oil market is currently in surplus, an expected “sharp recovery” in oil demand could shift the market back into deficit in the second half of 2023, the International Energy Agency said last week. This week, we expect continued market volatility as investors await a decision from the Federal Reserve on a next potential round of interest rate hikes. That’s why we’re stepping in now, while leaving room for an additional buy of Pioneer shares at a lower price. (Jim Cramer’s Charitable Trust is long PXD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
We’re adding to this oil stock after it fell 6% since last week
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