I will regurgitate this post because it looks like I will get what I want. Business is competition. The hedging program of EPE is its most valuable when oil is low. Looks like LINE and possibly CHK will die shortly. We need a few others. Less drilling happens when there are less drillers.
EPE has oil, NG and NGL. Last quarter they had Total MBoe/d of 114.5. This quarter will be more, but I don't have that number. This quarter we are projecting 22 cent earnings but a higher percentage of oil was hedged than in the third quarter. In the fourth quarter last year EPE earned 23 cents so I am hoping for an earnings beat of at least 2 cents.
My only concern is that the shorts tend to be more sophisticated than the longs and they may have access to better information. However, unless management has blatantly lied, I doubt that selling oil for significantly higher prices than the competition in the 4th quarter will result in a material earnings disappointment. The earnings estimate for EPE is currently 22 cents for the 4th quarter. It is possible that 20 cents of positive earnings, even though the competition is losing money, will be a disappointment. Or maybe the revenue will be slightly lower than expected, or the forecast can be adjusted downward. There are many games that can be played in Wall Street. So one quarter, even a great one, can be painted. You may see red but if everyone else calls it blue, maybe it's blue. So I look at the yearly picture. If we have excellent cash flow and positive earnings, and if this is expected to continue for all of 2016, I will not only not sell, but probably add to my position if for some reason this stock is pushed down even though the metrics are very good to excellent.. Hopefully, and probably, the stock will shoot up after the earnings come out.
Moody's concedes in its report that EPE will have good cash flow for 2016 and for the first quarter of 2017. But they do not take into account that by the second quarter of 2017 oil will probably be $50 - $70 a barrel. In all fairness they cannot make that assumption. Based on their analysis I would have to agree with them. However one should note that if oil is still $30 15 months from now that 85% of US drillers will either be gone or in much worse shape than EPE. The ratings are still not bad, just not as good as they were. I do however note the timing of the downgrade along with all the other downgrades. Maybe they all know something I don’t. This is possible. But if we have excellent earnings and cash flow reported this quarter the stock should react violently in a northward direction. We will see.
Even if we don't get noticed too quickly eventually we will. EPE is not a small company when it comes to production volume. I have added a bit to my position and expect to add some more with profits from my trading so it's OK by me if we don't get noticed for a few more months. The main thing is that management continues to deliver and the company metrics continue to outpace its competition (IMHO).
Even though EPE is a big company, WLL and OAS are better known. Look at the compative volumes. Top earnings for EPE when the competition is doing poorly should get us noticed.
I see some volume, though not too much. That must have been the shorting to set up for bigger purchases later in the month. I would not be surprised to see us go below $3.40 before the earnings comes out. Even spectacular earnings may not push us above $4 in the near term. These guys are good, but so am I.
I know you are posting to yourself Juan_Ton. You were desperate to get me back in knowing I would point out that you are using an impostor name with the third letter an L not an i. I suppose it worked. As you know I am no longer in UPL.
EPE will underperform numerous other energy stocks if oil goes up too fast. It's strength is its ability to survive low oil prices with a superior hedging position and super low drilling costs. February should be a tough month for oil and hopefully will be. I believe that March will be the month that the Saudi's, having accomplished much of what they set out to do, will make a deal to cut production that includes the Russians. After all they single handedly caused oil to go to $28 by increasing production. Otherwise it probably would have balanced out at around $45. They can easily reverse this. Even without a deal I would expect $45 oil by year end.
I note we have naterially underperformed WLL and OAS in the last few days. When this damn breaks, it will have a great deal of power behind it (IMHO).
WLL was downgraded yesterday so we shouldn't feel alone. So, what does one believe? A couple of posters on some message board or all these established brokerage firms and analysts, including Moody's. This poster is greatful that oil prices backed off today and also appreciates the downgrades so how smart can I be? I think we will revisit sub $30 oil yet again, hopefully asap. After all the refinery maintenane schedule will increase the daily oil glut of almost a million barrels a day for the month of February. And let's not forget Iran. They must be pumping their little hearts out now that the sanctions are lifted. I have already explained myself in prior posts so I have decided that there is little purpose of regurgitation. But I will say this, maybe Bernie is right about Wall Street. Not that I would vote for him..
Whatever group you are associated with it won't work. The original fake post was not by me as anyone can read by following the thread. I know your group wants to buy shares of EPE on the cheap and by attempting to discredit me you think it will help, but I post facts and not all posters are stupid. We have had about 4 downgrades recently and now these posts. You guys are deperate. Now I know that Juan_Ton_Amigo works with a group. I won't sell and neither will anyone with a third of a brain. NO VOLUME TODAY!
Ain't it amazing how many downgrades we are getting. Too bad. The secret is already out. Some retail investors will get in before some of the hedge funds and other market movers. I don't care how many downgrades we get. What a bunch of crooks Wall Street has..
Not really. This stock was in the low $2 range. In spite of the fact that oil may drop back to the high $20 range in February I think we are already on a trajectory up.
Traders kill valuation stocks with negative momentum, but with patience value investors make money. This company has a stellar balance sheet and a savvy management team. I wanted in on this stock for quite some time. Finally I saw my chance today. The negative momentum may take this down another peg, or not, but by year end we should see $90+ or even $100+. We shall see..