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Bear of the Day: Cabot Oil and Gas (COG)

David Bartosiak

With the market running strong and Phase One of the trade deal sign, investors feel like they are invincible. That could lead to some unnecessary risk-taking. The dart-board approach may work in runaway bull markets, but eventually, it’s earnings which will rule the day. By avoiding stocks with weak earnings outlooks, investors can possibly safeguard themselves from excessive downside. One way to avoid this is by steering clear of Zacks Rank #5 (Strong Sell) stocks. These stocks have the weakest earnings trends and have often seen downside guidance coming from analysts. 

One such stock is today’s Bear of the Day, Cabot Oil and Gas Corp (COG). Cabot Oil & Gas Corporation, an independent oil and gas company, explores for, exploits, develops, produces, and markets natural gas, oil, and natural gas liquids in the United States. It primarily focuses on the Marcellus Shale with approximately 174,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania. The company sells its natural gas to industrial customers, local distribution companies, gas marketers, and power generation facilities through gathering systems and pipelines. As of December 31, 2018, it had proved reserves of approximately 11.6 trillion cubic feet equivalent. 

Over the last sixty days, six analysts have cut their earnings estimates for next year while three analysts have cut estimates for next quarter. The bearish sentiment has dropped the Zacks Consensus Estimate for next year down from $1.42 to $1.15 while next quarter’s number has come down from 47 cents to 38 cents. That is a big reason why Cabot has come down to a Zacks Rank #5 (Strong Sell). Those estimates imply a 47.95% contraction in earnings next quarter and a 31.47% contraction for next year.

Cabot Oil & Gas Corporation Price and Consensus

Cabot Oil & Gas Corporation Price and Consensus
Cabot Oil & Gas Corporation Price and Consensus

Cabot Oil & Gas Corporation price-consensus-chart | Cabot Oil & Gas Corporation Quote

The Oil and Gas – Exploration and Production – United States Industry is actually in the good graces of the Zacks Industry Rank. The industry currently ranks in the Top 20% of our Zacks Industry Rank, so looking there for stocks is not a bad idea. Investors in this industry should check out a few other names which have favorable Zacks Ranks. Those stocks include SilverBow Resources (SBOW) and Stone Energy Corp (TALO).

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Stone Energy Corporation (TALO) : Free Stock Analysis Report
 
SilverBow Resources Inc. (SBOW) : Free Stock Analysis Report
 
Cabot Oil & Gas Corporation (COG) : Free Stock Analysis Report
 
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