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 oil and gas producer Approach Resources
So what: Total production increased 39% in the first quarter and revenue grew 52% to $30.6 million. But adjusted net income was only $3.5 million, or $0.10 per share, and analysts had expected earnings of $0.19 per share.
Now what: The expectations are getting high for oil and gas companies right now, and those that aren't beginning to turn a significant profit are being punished. Shares still trade at 18 times forward earnings estimates, and after this miss I wonder whether shares will look even more expensive. I'm not buying the move today and would like to see the company meet expectations before getting excited about this energy producer.
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