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Why Shares of Callon Petroleum Company Popped Today

By Travis Hoium - Mar 13, 2014 at 4:19PM

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Is this meaningful or just another movement?

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 energy explorer Callon Petroleum Company ( CPE -1.67% ) jumped 11% today after reporting earnings.

So what: Revenue dropped 8% in the fourth quarter, to $26.5 million, due to the sale of offshore fields. Net income for the quarter was $1.3 million, or $0.03 per share, which compares to a $0.4 million loss a year ago. 

Now what: Results largely matched expectations, and analysts think the company will report a $0.28 profit per share this year. The challenge will be growing production as much as anticipated after a drop year over year. Even with growth in shale production, I don't see the forward P/E ratio of 29 to be an appealing entry point with the company hovering around breakeven.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Callon Petroleum Company Stock Quote
Callon Petroleum Company
CPE
$47.19 (-1.67%) $0.80

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