On Jul 6, Zacks Investment Research upgraded natural gas
exploration and production (E&P) company,
), to a Zacks Rank #1 (Strong Buy).
ENCANA CORP (ECA): Free Stock Analysis Report
OASIS PETROLEUM (OAS): Free Stock Analysis
PETROQUEST ENGY (PQ): Free Stock Analysis
SANCHEZ ENERGY (SN): Free Stock Analysis
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Why the Upgrade?
Encana is one of the largest natural gas companies in North
America with a diverse/high quality portfolio of natural gas
assets spread over Canada and the U.S. This provides the company
with a huge inventory of reserves and a resource base capable of
robust production growth.
The operating environment and growth prospects seem bright for
Encana, as reflected by the rising earnings estimates for the
company. Over the last 60 days, the Zacks Consensus Estimate for
the second quarter of 2013 rose 15.4% to 15 cents per share. For
2013, the Zacks Consensus Estimate advanced 3.7% over the same
timeframe to 85 cents per share.
The momentum has been strong since Encana released its
first-quarter earnings results on Apr 23, 2013. Earnings per
share came in at 10 cents, exceeding the Zacks Consensus Estimate
of 4 cents by 150.0%. The better-than-expected result was mainly
backed by better drilling activities at prime areas such as the
Peace River Arch region and the Clearwater area.
Additionally, we appreciate Encana's strategy of disposing assets
that do not fit into its long-term growth plan. The company's
divesture program includes the disposition of high cost yet low
profit generating assets and a focus on asset base expansion that
would render high returns.
Other Stocks to Consider
There are certain other firms in the E&P sector that are
worth considering. These include
Oasis Petroleum Inc.
PetroQuest Energy Inc.
Sanchez Energy Corporation
). All three stocks carry a Zacks Rank #1 (Strong