For Immediate Release
Chicago, IL – January 28, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Peabody Energy , CONSOL Energy Inc. (CNX - Analyst Report) , Otter Tail Corporation (OTTR - Snapshot Report) , Wisconsin Energy Corp. (WEC - Analyst Report) and ExxonMobil Corporation ((XOM - Analyst Report) ).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: https://at.zacks.com/?id=5513
Here are highlights from Friday’s Analyst Blog:
Peabody Likely to Miss
Peabody Energy will release its fourth quarter 2012 financial results before the market bell on Jan 29, 2013. In the prior quarter, this coal operator reported a 50.00% earnings surprise. Peabody currently has a Zacks Rank #5 (Strong Sell). Let’s see how things are shaping up at Peabody prior to this announcement.
Factors to Consider This Quarter
2012 was overall a dull year for the coal industry as coal companies continued to face the brunt of a mild winter, rising competition from natural gas producers, increasing usage of alternate energy for electricity generation and compliance with increasing government regulation making their operations costlier.
Peabody’s underground Willow Lake Mine in Southern Illinois met with an accident in Nov 12, and the company decided to permanently idle the mine as it failed to comply with acceptable security standards. This closure will result in a charge of 10 cents to 15 cents (after tax) in the fourth quarter.
The company tried to sharpen its competitive edge and strengthen its global operation by making changes to the top management in both American and Australian business units.
Accordingly, our proven model does not conclusively show that Peabody Energy is likely to beat earnings this quarter. That is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here.
Positive Zacks ESP: This is because the Most Accurate estimate stands at 28 cents while the Zacks Consensus Estimate is lower at 26 cents, resulting in +7.69% ESP.
Zacks Rank #5 (Strong Sell): Peabody’s Zacks Rank #5 complicates the forecasting power of ESP making surprise prediction difficult. Even though Peabody registered earnings surprise in the last four quarters, we caution investors against the stock going into the earnings announcement, especially with the company observing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies which are linked with the coal industry you may want to consider on the basis of our model which shows that they have the right combination of elements to post an earnings beat this quarter:
CONSOL Energy Inc. (CNX - Analyst Report) has earnings ESP of +18.18% and carries a Zacks Rank #3 (Hold).
Otter Tail Corporation (OTTR - Snapshot Report) has earnings ESP of +6.67% and carries a Zacks Rank #3 (Hold).
Wisconsin Energy Corp. (WEC - Analyst Report) has earnings ESP of +2.38% and carries a Zacks Rank #1 (Strong Buy).
Exxon Strikes Oil in Colombia
U.S. energy major ExxonMobil Corporation ((XOM - Analyst Report) ) has encountered oil in exploration well Mono Arana 1, in the Middle Magdalena Valley of Colombia on the VMM2 block.
The Mono Arana 1 well was drilled to evaluate the hydrocarbon potential of a shallow conventional Tertiary Lisama sandstone reservoir and deeper shale and carbonate reservoirs in La Luna and Tablazo oil source rocks. The well was spud on Sep 23, to a depth of 9,942 feet in the Cretaceous La Luna structure.
ExxonMobil owns a 70.1% stake in the VMM2 block, while partners Canacol Energy Ltd. And and Vetra Exploracion y Produccion Colombia hold a 20% and 9.9% interest, respectively.
The drilling of the La Luna section shows encouraging results as around 760 feet of the section witnessed superior hydrocarbon deposits throughout the entire interval. The associate partners plan to test results from the La Luna later this year, after ExxonMobil takes over the operatorship of the Mono Arana 1 well.
Penetrating at roughly 4800 feet deep in the Lisama formation, the results show that it holds around 85 feet of potential net oil pay with an average porosity of 21% in three main zones. The company stated that two intervals flowed at a combined average gross rate of 1,242 barrels of oil per day during a short-term test in the tertiary Lisama sandstone.
The associated partners in the venture expect to evaluate and bring into commercial production the Lisama oil discovery in 2014. Further appraisal of the La Luna structure is also designed for the second quarter as it encountered high pressure while drilling the operation.
Although we remain skeptical due to ExxonMobil’s continued disappointing production trend, we expect major capital projects and upstream ventures to drive 2013 production volume. Additionally, the start-ups of Kearl and Kashagan and the production ramp up from 2012 start-ups in Angola and Nigeria are also added incentives.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: https://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: https://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at https://at.zacks.com/?id=5518.
Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339