On Feb 22, Zacks Investment Research upgraded natural gas
Ultra Petroleum Corp.
) to a Zacks Rank #2 (Buy).
Why the Upgrade?
Ultra Petroleum reported better-than-expected fourth-quarter 2013
earnings on Feb 20, 2014. Earnings came in at 42 cents per share,
which comfortably surpassed the Zacks Consensus Estimate of 37
cents. A significant decline in operating costs along with the
increase in price realizations led to the beat. The recently
reported quarter results mark the fourth consecutive earnings
beat for the company, with an average surprise of 16.8%.
The company's total operating expenses for fourth-quarter 2013
stood at $141.8 million, a whopping 78% decrease from $643.2
million in the year-ago period. Ultra Petroleum's competitive
cost structure enabled it to achieve a 58% adjusted operating
cash flow margin and a 29% adjusted net income margin in the
Moreover, Ultra Petroleum controls substantial acreage in and
around the prolific Jonah natural gas field and the Pinedale
Anticline area in the Green River Basin. Both these areas are
replete with rich untapped natural gas reserves. The company has
also amassed a large acreage in the prolific Marcellus Shale play
- a key natural gas drilling area.
Lastly, the Zacks Consensus Estimate for first-quarter 2014
increased 5.5% to 58 cents per share as most of the estimates (6
out of 10 estimates) were revised higher over the last 60 days.
Additionally, for full-year 2014, the estimates were raised over
the same time frame, lifting the Zacks Consensus Estimate by 6.0%
to $2.30 per share.
Other Stocks that Warrant a Look
ATHLON ENERGY (ATHL): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
ULTRA PETRO CP (UPL): Free Stock Analysis
WARREN RSRCS (WRES): Free Stock Analysis
To read this article on Zacks.com click here.
In addition to Ultra Petroleum, one can also consider other
better-ranked players in the exploration and production sector
Athlon Energy Inc
Matador Resources Company
Warren Resources Inc
). All the stocks sport a Zacks Rank #1 (Strong Buy).