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Lonestar Resources (LONE) Soars to a 52-Week High, Time to Cash Out?

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Have you been paying attention to shares of Lonestar Resources US LONE? Shares have been on the move with the stock up 24.8% over the past month. LONE hit a new 52-week high of $8.90 in the previous session. Lonestar Resources has gained 115.4% since the start of the year compared to the 5.2% move for the Oils-Energy sector and the 5.4% year-to-date return for its peer group.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 13, 2018, Lonestar Resources reported EPS of $-0.13 versus the Zacks Consensus Estimate of $-0.16 while it beat the consensus revenue estimate by 13.9%.

For the current fiscal year, Lonestar Resources is expected to post earnings of $-0.03 per share on $181.75 million in revenues. This represents a 92.86% change in EPS on a 93.21% change in revenues. For the next fiscal year, the company is expected to earn $0.64 per share on $226.32 million in revenues. This represents a year-over-year change of 2233.33% and 24.52%, respectively.

Valuation Metrics

Lonestar Resources may be at a 52-week high right now, but what might the future hold for LONE? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Lonestar Resources has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Lonestar Resources currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if Lonestar Resources meets the list of requirements. Thus, it seems as though LONE shares could have a bit more room to run in the near term.

How Does Lonestar Resources Stack Up to the Competition?

Shares of Lonestar Resources have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Cheniere Energy LNG, Continental Resources CLR, and Anadarko Petroleum , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

The Zacks Industry Rank is in the top 11% of all the industries we have in our universe, so it looks like there are some nice tailwinds for LONE, even beyond its own solid fundamental situation.