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  • 4 High Profit Oil & Gas Stocks On Track For Growth 0 comments
    Sep 12, 2012 11:29 AM | about stocks: AXAS, CLR, CPE, ROSE

    In thinking about the factors that correlate to an increase in a stock's value, two qualities come to mind: profit and growth. A company pulling in strong profits sends a message that there is evident demand, operational expenses are efficient, and management has set pricing at a level that generates profits. These profits will be very helpful to a company that has projected EPS growth rates above 25% for the coming year as they will provide funding to fuel the growth. If stocks with the traits of high profits and impressive growth projections appeal to you, then you will find our list of oil and gas stocks quite interesting.

    EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.

    The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue

    Return on Assets [ROA] illustrates how much a company is generating in earnings from its assets alone. This metric gives investors a picture of how profitable the company is relative to the assets in current possession. As well, it lets investors see how efficient and effective management is at generating earnings from the company's assets. While most management teams can probably make money by throwing money at an issue very few can make very large profits with little investment.

    We first looked for oil & gas stocks. We then looked for companies with estimated high-growth, with 1-year projected EPS growth above 25%. We then looked for businesses that have been able to retain strong profit margins on the bottom line (Net Margin [TTM]>10%)(ROA [TTM]>10%). We did not screen out any market caps.

    Do you think these stocks hold value that has yet to be priced in? Please use our list to assist with your own analysis.

    1) Continental Resources Inc. (NYSE:CLR)

    SectorBasic Materials
    IndustryIndependent Oil & Gas
    Market Cap$13.26B
    Beta1.78

    CLR stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate35.99%
    Net Margin32.29%
    Return on Assets13.47%
    Short Interest9.60%

    Continental Resources, Inc. engages in the exploration, development, and production of crude oil and natural gas primarily in the north, south, and east regions of the United States. The company primarily sells its oil and natural gas production to end users, as well as to midstream marketing companies or oil refining companies at the lease. As of December 31, 2011, its estimated proved reserves were 508.4 million barrels of crude oil equivalent, with estimated proved developed reserves of 205.2 million barrels of crude oil equivalent. The company had interests in 3,255 wells and served as the operator of 2,082 of these wells. Continental Resources, Inc. was founded in 1967 and is headquartered in Enid, Oklahoma.

    2) Abraxas Petroleum Corp. (NASDAQ:AXAS)

    SectorBasic Materials
    IndustryIndependent Oil & Gas
    Market Cap$177.29M
    Beta1.53

    AXAS stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate70.00%
    Net Margin39.95%
    Return on Assets11.84%
    Short Interest13.31%

    Abraxas Petroleum Corporation, an independent energy company, engages in the acquisition, exploitation, development, and production of oil and gas in the United States and Canada. The company operates oil and gas assets in the Rocky Mountain, Mid-Continent, Permian Basin, and onshore Gulf Coast regions of the United States, as well as in the province of Alberta, Canada. As of December 31, 2011, its estimated net proved reserves were 29.0 million barrels of oil equivalent. The company was founded in 1977 and is based in San Antonio, Texas.

    3) Callon Petroleum Co. (NYSE:CPE)

    SectorBasic Materials
    IndustryIndependent Oil & Gas
    Market Cap$218.77M
    Beta2.49

    CPE stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate591.67%
    Net Margin69.87%
    Return on Assets25.13%
    Short Interest3.45%

    Callon Petroleum Company engages in the acquisition, exploration, development, and production of crude oil and natural gas properties. The company's properties are located in the Permian Basin in west Texas; the Haynesville Shale in northern Louisiana; and the Gulf of Mexico. As of December 31, 2011, its estimated net proved reserves totaled 15.9 million barrel of oil equivalent, including 10.1 million barrels of oil and 35.1 billion cubic feet of natural gas. The company was founded in 1950 and is headquartered in Natchez, Mississippi.

    4) Rosetta Resources, Inc. (NASDAQ:ROSE)

    SectorBasic Materials
    IndustryIndependent Oil & Gas
    Market Cap$2.28B
    Beta2.10

    ROSE stock chart

    Key Metrics

    1-Year Projected Earnings Per Share Growth Rate44.81%
    Net Margin29.71%
    Return on Assets15.09%
    Short Interest9.86%

    Rosetta Resources Inc., an independent exploration and production company, engages in the acquisition, exploration, development, and production of onshore oil and gas resources in the United States. It owns producing and non-producing oil and gas properties located primarily in South Texas, including the Eagle Ford, and in the Southern Alberta Basin in Northwest Montana. As of December 31, 2011, the company had an estimated 965 billion cubic feet equivalent of proved reserves, including 36,370 million barrels of oil, 50,219 million barrels of natural gas liquids, and 446 billion cubic feet of natural gas, as well as drilled 53 net wells. Rosetta Resources Inc. was incorporated in 2005 and is headquartered in Houston, Texas.

    *Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/06/2012.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Business relationship disclosure: This article was prepared for ZetaKap Media by one of our full-time analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

    Themes: quick-picks-lists Stocks: AXAS, CLR, CPE, ROSE
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