Market Overview

CONSOL Energy and Other Energy Stocks Worth a Look Now

In the wake of the first-quarter earnings season, analysts at Sterne Agee have issued a research report on the energy and industrials sectors.

Their energy stock recommendations include CONSOL Energy (NYSE: CNX), Superior Energy Services (NYSE: SPN) and Whiting Petroleum (NYSE: WLL). Below is a quick look at how these three stocks have fared and what analysts expect from them.

Note that from the industrials sector Sterne Agee recommended Fluor (NYSE: FLR), Greenbrier Companies (NYSE: GBX) and Martin Marietta Materials (NYSE: MLM). They also liked Boeing (NYSE: BA) and automakers Ford (NYSE: F) and General Motors (NYSE: GM).

CONSOL Energy

This coal and natural gas producer sports a market capitalization of about $8 billion and it is headquartered in Canonsburg, Pennsylvania. The dividend yield is about 1.5 percent. The long-term earnings per share (EPS) growth forecast is about 12 percent, though the return on equity is less than eight percent. And note that the price-to-earnings (P/E) ratio is higher than the industry average.

The short interest in CONSOL Energy was more than four percent of the float as of the April 30 settlement date. The number of shares sold short had been falling since the beginning of the year, until the 2.5 percent rise in the most recent period. But days to cover declined to less than four.

Of the 26 analysts that follow the stock that were polled by Thomson/First Call, eight rate the stock at Strong Buy and 14 others also recommend buying shares. The mean price target, or where the analysts expect the share price to go, indicates more than 16 percent potential upside. Furthermore, the Sterne Agee target is about 41 percent higher than the current share price.

The share price is about 13 percent higher than at the beginning of the year, but more than four percent lower than the 52-week high reached last fall. Over the past six months, the stock has outperformed competitors Alpha Natural Resources (NYSE: ANR), Arch Coal (NYSE: ACI) and Peabody Energy (NYSE: BTU).

Superior Energy Services

This oilfield services provider has a market cap of more than $4 billion, but it offers no dividend. Its long-term EPS growth forecast is more than 18 percent, and the P/E ratio is less than the industry average. The operating margin is better than the industry average, but the return on equity is less than 10 percent.

The short interest in this Houston-based company was less than two percent of the float at the end of April, after the number of shares sold short rose more than 10 percent in the previous two periods. The average daily volume in the most recent period was the second highest this year.

All of the 18 analysts surveyed recommend buying shares, with seven of them rating the stock at Strong Buy. And the analysts think shares have some room to run, as their mean price target is more than 12 percent higher than the current share price. Sterne Agee's target indicates more than 15 percent upside, and would put shares in a neighborhood they have not seen since 2011.

The share price hit a 52-week high this morning, and it is more than 32 percent higher year-to-date. Over the past six months, the stock has outperformed larger competitors Baker Hughes (NYSE: BHI) and Schlumberger (NYSE: SLB), as well as the broader markets.

Whiting Petroleum

This independent oil and gas company is headquartered in Denver. It has a market cap near $5.5 billion, but it does not offer a dividend. The long-term EPS growth forecast is more than 10 percent. Whiting Petroleum's operating margin is higher than the industry average, and its return on equity is about 12 percent.

The number of Whiting Petroleum shares sold short as of the most recent settlement date represented a bit more than three percent of the total float. That was highest level of short interest since last September, after a surge of about 19 percent in the most recent period. The days to cover was about two.

Some 33 analysts were polled, and 11 of them rate the stock at Strong Buy. Another 16 also recommend buying shares. None of them recommends selling. Their mean price target suggests that the analysts on average see more than 22 percent upside potential. The Sterne Agee target is more than 24 percent higher than the current share price.

The share price is up less than six percent since the beginning of the year. In fact, shares have traded mostly between $40 and $50 over the past year. The stock has underperformed Anadarko Petroleum (NYSE: APC) and Cabot Oil & Gas (NYSE: COG), as well as the broader markets, over the past six months.

Posted-In: alpha natural resources anadarko petroleum arch coal Baker Hughes Boeing cabot oil & gas consol energy fluor Ford General Motors GM greenbrier companies Martin Marietta Materials Peabody Energy Schlumberger Sterne Agee Superior Energy Services whiting petroleumLong Ideas Short Ideas Trading Ideas Best of Benzinga

 

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