February 22, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Cabot Oil & Gas (NYSE: COG ) jumped 10% today, after announcing earnings.
So what: Revenue rose 38%, to $369.9 million, ahead of the $349.5 million estimate from analysts. Net income was $40.9 million, or $0.19 per share, but on an adjusted basis, the company earned $0.27 per share, $0.06 ahead of estimates.
Now what: A big jump in production can be credited for the improved results, and the momentum doesn't appear to be slowing down. Proved gas reserves were up 27%, indicating there is plenty of gas to be found in future quarters. Shares are trading at 23 times forward earnings, which looks like a fair price given this quarter's results. I'd like to see shares pull back to get a better buy-in price, but I think they can move higher long-term.
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