At roughly 3 p.m. EDT on Oct. 22, shares of exploration and production company Centennial Resource Development (NASDAQ: CDEV) were higher by 6.5%. Swift price moves aren't exactly shocking for this energy driller. The day's gain, meanwhile, could have been driven by one of two reasons.
With a roughly $2 billion market cap , Centennial is a particularly small player in the energy patch . It is up more than 370% so far this year, but witnessed a painful drawdown of nearly 45% between June and September before rallying back toward yearly highs. This is the type of volatility you can see in a small exploration and production name, where its top and bottom lines are driven primarily by the ups and downs of the prices of oil and natural gas. Essentially, it is a somewhat leveraged play on the price of energy.
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Why Centennial Resource Development Stock Jumped as Much as 6% Today