Take a walk outside and, in much of the country, you'll quickly realize that fall is upon us.
The changing of the seasons means many different things for different people. For investors, it means the end of the third quarter, and the beginning of earnings season. We here at the Fool encourage investing with a long-term time horizon. That means that we should take a balanced view of quarterly earnings reports, paying attention, but never giving too much weight to any one report.
At the same time, it's always a good idea to check in with your stocks a few times a year, and this earnings season is as good a time as any.
Read below to find out why Nov. 1 will be such an important date for energy investors, and at the end of the article, I'll offer up access to a special free report that identifies one stock as a must own energy holding.
The morning of Nov. 1
When companies report earnings, they usually will do it either before the market opens at 9:30 a.m. on the East Coast, or after it closes at 4:00 p.m. The following three companies, all important within their respective fields, will be reporting earnings before the market opens on Nov. 1. For context, I've also included what analysts are expecting from each company.
|Company||Expected EPS||Expected Revenue|
|Ultra Petroleum (NYSE: UPL )||$0.46||$277 million|
|ExxonMobil (NYSE: XOM )||$1.92||$116 billion|
|Royal Dutch Shell (NYSE: RDS-B )||$1.97||$117 billion|
Not only is ExxonMobil one of the largest companies the financial world has ever seen, a leader in providing gas for both our cars and industry, but it's also the largest natural gas extractor in the United States.
The company recently announced plans to boost capacity for specialty lubricants by 25%, further entrenching itself within peripheral energy fields.
And to top it off, the company's nice 2.5% dividend yield only uses up 23% of the company's earnings to pay out -- meaning there's a lot of room for growth. Don't expect any news on the dividend front, however, as changes are usually announced during the fourth-quarter-earnings release.
Royal Dutch Shell, on the other hand, also has its fingers in several energy pies. One thing to look for in the earnings call will be any comments regarding the company's shutting down a Nigerian oil pipeline after a fire broke out at the beginning of the month.
On the natural gas front, the company is focusing on helping to supply and build out natural gas filling stations at over 100 U.S. locations, as well as in Western Canada, dubbed the "Green Corridor Project." Keep your ears open for any news on this front as well.
Finally, we have the much smaller Ultra Petroleum. The company's main focus is on natural gas, having grown its proven reserves from 444 billion cubic feet in 2000 to 4.4 trillion by the end of 2010.The problem for the company, however, is that the cheap price of natural gas has driven down its stock as well.
Several of our own analysts think the natural gas sector is poised for a rebound, however. So keep your eyes and ears open to see if the management at Ultra is willing to say it feels the same way.
The evening of Nov. 1
Once the market is done handing down its short-term verdict on the three companies mentioned above, the following two energy companies will be releasing their earnings numbers after hours.
|Company||Expected EPS||Expected Revenue|
|Chesapeake Energy (NYSE: CHK )||$0.09||$2.4 billion|
|Kodak Oil & Gas (NYSE: KOG )||$0.12||$126 million|
You'd be hard pressed to find an energy company that's had a more trying year than Chesapeake. The country's second-largest natural gas producer has been dogged by dubious behavior from its CEO Aubrey McClendon, and questionable practices in land acquisition.
That being said, the stock is up almost 50% since hitting its mid-May lows. Investors likely will be paying attention to both the company's plans to unload lots of land and any moves that might be made in the executive suite.
And finally, we have much smaller Kodak Oil & Gas. The company is concentrated almost entirely on extracting natural gas and oil from the Bakken Shale along the U.S. and Canadian border.
Though natural gas prices have started a slow recovery, investors aren't buying into the potential from Kodak quite yet. The stock trades for a somewhat pricey 25 times earnings, but analysts are expecting earnings to grow by almost 70% between 2012 and 2013. Keep your eyes open to see if the company can really fulfill that potential.
Beyond this one date
Clearly, it'll be important to keep your eyes and ears open come Nov. 1. But in reality, there are more than just these five companies to invest in if you're interested in energy companies.
With the swelling of the global middle class energy consumption will skyrocket over the next few decades, and long-term investors know that you want exposure to this space now. We've picked one incredible natural gas company that presents a rare "double-play" investment opportunity today. We're calling it "The One Energy Stock You Must Own Before 2014," and you can uncover it today, totally free, in our premium research report. Click here to read more.