What Happened?

A number of stocks jumped in the afternoon session after President Trump held a press conference reaffirming his deadline for Iran to reopen the Strait of Hormuz or face strikes on its power plants and bridges. Crude oil prices rose, pulling energy equities higher as markets priced in the risk of prolonged conflict. Iran's rejection of a proposed 45-day ceasefire deepened that anxiety.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Infrastructure company New Fortress Energy (NASDAQ: NFE) jumped 2.1%. Is now the time to buy New Fortress Energy? Access our full analysis report here, it’s free.
• Mixed or Offshore Upstream E&P company Kosmos Energy (NYSE: KOS) jumped 6.2%. Is now the time to buy Kosmos Energy? Access our full analysis report here, it’s free.
• Oilfield Services company Nabors Industries (NYSE: NBR) jumped 3.6%. Is now the time to buy Nabors Industries? Access our full analysis report here, it’s free.
• Oilfield Services company Oceaneering (NYSE: OII) jumped 3.2%. Is now the time to buy Oceaneering? Access our full analysis report here, it’s free.
• Mixed or Offshore Upstream E&P company Seadrill (NYSE: SDRL) jumped 3.4%. Is now the time to buy Seadrill? Access our full analysis report here, it’s free.

Zooming In On Kosmos Energy (KOS)

Kosmos Energy’s shares are extremely volatile and have had 81 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 4 days ago when the stock gained 8.7% on the news that geopolitical tensions in the Middle East escalated, pushing crude oil prices sharply higher. President Trump's televised remarks signaled that the U.S. conflict with Iran could continue for several more weeks, increasing investor nervousness. This uncertainty drove West Texas Intermediate and Brent crude prices up. With supply potentially constrained, markets expected that higher global oil prices would be reflected in stronger earnings for oil and gas companies.

Kosmos Energy is up 244% since the beginning of the year, and at $3.08 per share, has set a new 52-week high. Investors who bought $1,000 worth of Kosmos Energy’s shares 5 years ago would now be looking at an investment worth $1,005.

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