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Devon Energy Bets on Scale With Coterra Acquisition

Written by Chris Markoch

It was a buy-the-rumor, sell-the-news week for Devon Energy (NYSE: DVN). On Feb. 11, the company announced an all-stock merger with Coterra Energy (NYSE: CTRA) that if approved by shareholders of both companies will create a $58 billion energy giant.

DVN stock was up nearly 4% before the announcement but fell 2.2% on Feb. 12. Price action like that isn’t uncommon; merger announcements attract some investors while pushing others away.

What adds some volatility to this merger announcement is that Devon Energy will report Q4 2025 earnings after the market close on Feb. 17.

At that time, analysts and investors will hope to hear management strike a confident tone about the merger approval. One key area of interest will be the company’s dividend.

Why Coterra? And Why Now?

Let’s take those questions in reverse order. The timing of the merger has to do with the ongoing consolidation in the oil and gas industry.

The U.S. shale industry has matured, meaning companies are looking for operational efficiency as opposed to drilling more wells—especially with waning demand forecasted for 2026. To that end, the combined company will have scale, diversification, and resilience. That’s particularly important as the price of oil remains under pressure.

The merger of the two upstream oil and gas companies also brings geographic diversity. Coterra primarily operates in the Marcellus Shale basin (northeast Pennsylvania), the Andarko Basin (in Oklahoma) and the Delaware Basin (in southeast New Mexico and Texas). Devon, on the other hand, is concentrated in the Delaware Basin, so this merger expands its reach, making it less impacted by fluctuations in oil prices.

All Eyes Will Be on the Dividend

Oil and gas stocks are among the most cyclical in the energy sector. That’s why large-cap names, including Devon Energy, pay a dividend as a way to increase shareholder value in a sector that can be unforgiving.

DVN stock’s dividend currently yields 2.18%, or 24 cents per share quarterly. Meanwhile, Coterra’s dividendcurrently yields 2.86%, or 22 cents per share quarterly. The companies have announced plans for a 31.5 cents per share dividend once the merger closes, which represents an increase of 31% from Devon’s current payout.

It’s also why the merger’s all-stock nature is important. This prevents the combined company from piling on debt. That’s critical in an industry that’s acutely impacted by commodity prices. If oil and gas prices drop more—as some analysts believe they will—a company wouldn’t want to be heavily leveraged.

The flip side, however, is that the combined company will mean a larger share count, which can be dilutive to earnings per share (EPS). The company will have to generate sufficient cash to maintain and ideally increase its dividend.

Investors and Traders May See the Merger Differently

Income-focused, buy-and-hold investors will likely be positive about the deal. The merger will create a larger, more resilient shale producer. And since Devon will be moving its operations to Houston, it will have deeper ties to a major energy hub.

On the other hand, short-term traders or dividend investors who prioritize yield may want to wait for more certainty about the safety and growth of that dividend.

Analysts Are Signaling Approval

On the day of the announcement, Raymond James raised its price target on DVN stock to $52 from $44. Going back to the beginning of the year, several analysts have a price target of $50 or higher.

A move to $50 would be a gain of approximately 10% above the current consensus price, and it would represent a gain of nearly 20% from the closing price on Feb. 12.

Activity will likely be volatile in the week before the company reports earnings. Investors who are on the sidelines but looking to get involved may want to wait for the results before getting involved. READ THIS STORY ONLINE

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Bitcoin Bears Might Benefit From These Inverse Crypto ETFs

Written by Nathan Reiff

It seemed for a while that a meteoric—if uneven—rise in Bitcoin was all but inevitable, as the top cryptocurrency flew past the $100,000 threshold midway through 2025. However, an October high couldn’t last, and despite making a modest recovery to end the year, BTC is once again plummeting early in 2026. In fact, Bitcoin has shed about a quarter of its value since the start of the year and has now sunk to just above half what it traded for only a few months back.

Longtime “HODL-ers” might be willing to ride out a potential prolonged drop in the price of Bitcoin, but more active investors seeking to stop the bleeding are perhaps more likely to find a way to win gains even as the cryptocurrency market is falling. One of the best ways to make a direct bet against Bitcoin or another cryptocurrency is through a unique crypto exchange-traded fund (ETF) with a short strategy. Though these funds tend to be highly risky, in the right circumstances, they can turn a bad day for Bitcoin into a win for individual investors.

Liquid and Popular Fund Aiming For -1X Bitcoin Performance

One of the more straightforward ETFs shorting the cryptocurrency space is the ProShares Short Bitcoin ETF (NYSEARCA: BITI). BITI aims for a -1x relationship to the daily performance of Bitcoin, meaning that when the price of Bitcoin falls in a single day, BITI should replicate that in the positive direction. The effect is similar to what many investors may seek with crypto margin trading or exchange-traded futures contracts, but it comes with a significantly lower hurdle for investors unfamiliar with those strategies.

BITI uses a portfolio of futures and swaps to replicate the inverse of the performance of Bitcoin and does not actually short Bitcoin directly. As such, the fund’s strategy is somewhat risky, and it is not designed to correspond to the price movement of Bitcoin over a longer period than one day. This makes it appropriate only for investors trading actively and with a fairly high tolerance for risk.

Given the unique nature of BITI’s investment strategy, investors may be willing to tolerate its high expense ratio of 1.01%. The fund also provides monthly distributions, with a dividend yield of 2.26% as an added bonus. The fund also has a one-month average trading volume above 3 million, helping to ensure that investors don’t run into liquidity issues.

Highly Risky Double Inverse Approach For Investors Willing to Take the Chance

Investors finding that BITI doesn’t give them enough exposure may take a chance on the ProShares UltraShort Bitcoin ETF (NYSEARCA: SBIT). SBIT takes a very similar approach to BITI above, but it aims for -2x returns rather than -1x. While this can magnify gains on a day in which Bitcoin drops in price, it can also double losses if the crypto heads in the other direction. As such, SBIT is even riskier than BITI.

SBIT comes with a slightly lower annual fee of 0.95% and with comparable trading volume, so liquidity should not be a concern in this case either. Its dividend yield is not as compelling as BITI’s, though, at just 0.61%.

Distributions may not be the primary appeal here, as investors targeting SBIT are likely doing so on a strong conviction that Bitcoin is headed downward on any given day.

Ether Alternative, But Trading Volume Is a Red Flag

Bitcoin still commands a strong gravitational pull in the cryptocurrency space, and when BTC prices fall, so too do the prices of most other cryptos. Finding ways to short other cryptocurrencies can be tougher, but the ProShares Short Ether ETF (NYSEARCA: SETH) is a convenient way to make a bet against the price of Ether, the second-largest token by market cap.

SETH is also offered by ProShares, like both funds above, and takes a similar approach to BITI, although it focuses on Ether instead of Bitcoin. The fund aims for -1x exposure to the price of Ether and also resets daily.

It comes at a slightly lower price of 0.95% annually, making it a bit more affordable than BITI. In exchange, though, investors should be prepared to deal with a fund that is much less popular—SETH has just $16 million in assets under management and a one-month average trading volume below 84,000, so liquidity may very well be a concern for those looking to make quick trades. READ THIS STORY ONLINE

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Verisk Is Extremely Oversold—2 Reasons Contrarians Are Circling

Written by Sam Quirke

After a bruising start to the year that has accelerated sharply into February, shares of Verisk Analytics, Inc (NASDAQ: VRSK) are trading around $170. That means they’re down roughly 25% since the end of January, having lost close to 50% from last summer’s highs. This has not only wiped out years of steady gains but also sent the stock back to the same prices it traded at in 2023.

For Versik investors, it’s been a slow, steady, and painful descent, with many compounding factors. A disappointing earnings report last quarter intensified investor concerns around slowing growth. This valuation looked stretched relative to that growth, and whether expectations tied to AI-driven upsidehad simply run too far ahead of reality. What was once seen as a steady stock suddenly found itself quite exposed and vulnerable. 

The result has been relentless selling. But with earnings due next week and technical indicators flashing extreme readings, contrarian investors are starting to ask themselves, has the market overdone it? Here are two reasons they might be onto something. 

Reason #1: Sentiment Is Completely Washed Out

The most obvious reason is technical. With this latest phase of selling, Verisk’s relative strength index (RSI) has sunk to 20, one of the lowest readings in the stock’s trading history. An RSI at that level signals extremely oversold conditions and often indicates that the selling is nearing exhaustion. 

This is because stocks rarely decline in a straight line forever. At some point, short sellers take profits, and value-focused buyers begin to step back in. Even if the stock’s near- to mid-term prospects remain uncertain, sharp rebounds often follow this kind of one-way selling.

We may have seen early signs of that shift in the Feb. 11 session, when the stock popped off the lows to log its first green day in more than two weeks.

To be sure, one positive session doesn’t confirm a bottom, but after a stretch of near-uninterrupted selling, it does signal that downside momentum might be starting to wane.

For contrarians, the logic here is straightforward. When sentiment becomes this negative and technical indicators reach these rare extremes, it feels like the market might have priced in the worst-case scenario.

Reason #2: Analysts Are Beginning to Lean Back In

These extreme technical setups are made even more compelling when accompanied by fresh analyst support. On Feb. 11, the team at Wells Fargo reiterated its Overweight rating on Verisk and issued a fresh $237 price target. From current levels, that implies roughly 35% upside. 

This latest update isn’t about blind optimism in the stock’s ability to get back to last summer’s record highs—instead, it’s about acknowledging that the market might have been over-eager in its selling.

The fact that at least one major analyst is willing to reiterate a bullish stance at a time when the RSI is printing record lows suggests the fundamental story may not be as broken as the price action implies. 

That matters, particularly with earnings due on Feb. 18. Expectations are now far lower than they were last quarter, and in situations like this, that creates a meaningful risk/reward profile.

The Line in the Sand Ahead of Earnings

Technically, the Feb. 11 low around the $165 level is the critical line level to watch. A decisive break below that support would signal that sellers remain firmly in control and that further downside in the short-term is almost guaranteed. That would likely invite fresh momentum selling and undermine the contrarian thesis before it has a chance to develop.

Conversely, if the stock continues to show signs of buying at this level and consolidates above $170 ahead of the company’s earnings report, the setup changes. The fresh presence of stabilising price action at these recent levels of extreme pessimism could set the stage for a sharp snapback rally if results are judged to be even okay. In situations like this, it doesn’t take much good news to trigger outsized upside moves. READ THIS STORY ONLINE

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