CDEV earnings
CDEV earnings
Hi Dan, have you had a chance to look at the CDEV earnings that were reported last night? The report looked good but they missed on the earnings estimate.
Re: CDEV earnings
Production came in slightly below forecast.
Keep in mind:
> CDEV uses the "Successful Efforts" method of accounting, which is more conservative than the "Full Cost" method.
> Adjusted Net Income was $66.3 million, or $0.25 earnings per share (add back non-cash impairment and mark-to-market adjustment on their hedges)
> The company is still on-track for ~90% YOY production growth this year
> CDEV has a very strong balance sheet and more than enough liquidity to continue funding their Aggressive Growth plan.
I have updated my forecast/valuation model for CDEV and it will be posted to the EPG website this afternoon.
I have lowered my valuation by $1 to $30/share.
In the last 3 months, 4 ranked analysts set 12-month price targets for CDEV. The average price target among the analysts is $25.50.
Keep in mind:
> CDEV uses the "Successful Efforts" method of accounting, which is more conservative than the "Full Cost" method.
> Adjusted Net Income was $66.3 million, or $0.25 earnings per share (add back non-cash impairment and mark-to-market adjustment on their hedges)
> The company is still on-track for ~90% YOY production growth this year
> CDEV has a very strong balance sheet and more than enough liquidity to continue funding their Aggressive Growth plan.
I have updated my forecast/valuation model for CDEV and it will be posted to the EPG website this afternoon.
I have lowered my valuation by $1 to $30/share.
In the last 3 months, 4 ranked analysts set 12-month price targets for CDEV. The average price target among the analysts is $25.50.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: CDEV earnings
As I see the oil price entering a bear market I am wondering if we can own any of these energy stocks. This is getting brutal.
Re: CDEV earnings
I have never been good at timing the market. My long term view for oil is close to Raymond James new forecast. I think WTI will bounce back after the election if the GOP holds the Senate and average $70 for Q4 and Q1, then I think oil will climb as the peak demand period (June to Sept) approaches.
This week I think the oil traders are worried about the election results and the impact of the waivers to U.S. sanctions on Iran.
> The waivers are only for six months
> The waivers require proof that each nation is lowering imports from Iran.
The big cold wave that hits the Great Lakes Region this weekend will also increase demand for heating oil. Refiners are coming out of the maintenance periods, so they will be processing more crude oil. They need to work on rebuilding the depleted distillate inventories (diesel and heating oil).
What you buy and when you buy and sell is totally up to you. If this pullback in oil prices keeps you up at night then maybe you should sell.
All of the forecast/valuation models are "macro-driven", so you can put in lower oil prices in 2019 and see how it impacts revenues, earnings and cash flow per share. Just remember to consider each company's hedges.
This week I think the oil traders are worried about the election results and the impact of the waivers to U.S. sanctions on Iran.
> The waivers are only for six months
> The waivers require proof that each nation is lowering imports from Iran.
The big cold wave that hits the Great Lakes Region this weekend will also increase demand for heating oil. Refiners are coming out of the maintenance periods, so they will be processing more crude oil. They need to work on rebuilding the depleted distillate inventories (diesel and heating oil).
What you buy and when you buy and sell is totally up to you. If this pullback in oil prices keeps you up at night then maybe you should sell.
All of the forecast/valuation models are "macro-driven", so you can put in lower oil prices in 2019 and see how it impacts revenues, earnings and cash flow per share. Just remember to consider each company's hedges.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: CDEV earnings
I'm sorry for complaining so much but this has been a very difficult sector to invest in. Also it seems there is something going on with either short sellers or the Saudis playing games.
Re: CDEV earnings
The Sweet 16 are actually doing quite well. Hard to believe how out of favor this sector is this year.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group