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Bull Of The Day: SilverBow Resources (SBOW)

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SilverBow Resources (SBOW - Free Report) is a Zacks Rank #1 (Strong Buy) that recently reported a strong quarter as did several oil stocks. Crude has been near or above $100 for the better part of the last few months.  High oil prices tend to help the oil patch stocks.  Let’s explore more about this stock in this Bull Of The Day article.

Description

SilverBow Resources, Inc. engages in the exploration, development and production of oil and natural gas properties. Its primarily project includes the Eagle Ford wells, Burr Ferry, South Bearhead Creek and Lake Washington fields. SilverBow Resources, Inc. is headquartered in Houston, TX.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For SBOW, I see four straight quarters where the company beat of the Zacks Consensus Estimate.  That is always good to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).

The average positive earnings surprise over the course of the last year works out to be 20%.

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher.  For SBOW, I see annual estimates moving higher.

Over the last 60 days, I see a few increases.

The full fiscal year 2022 has moved from $7.60 to $12.69.

Next has more than doubled, going from $7.96 to $16.57.

Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).

Valuation

I see a great valuation for SBOW.  The forward PE is 2.8x and that is  very low considering the 49% topline growth the company posted in the most recent quarter.  The price to book of 2.7x is very low given the growth in earnings.  The price to sales comes in at 1.4, which is low and indicates that the market does not value each sales dollar all that highly.  Margins have increased in a big way over the last couple quarters moving from 28.5% to 34.3% and if they keep that up with solid revenue growth then earnings are go to be moving a lot higher.

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SilverBow Resources Price, Consensus and EPS Surprise

SilverBow Resources Price, Consensus and EPS Surprise

SilverBow Resources price-consensus-eps-surprise-chart | SilverBow Resources Quote


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