Chicago, IL – June 16, 2022 – Zacks Equity Research shares Cabot CBT as the Bull of the Day and DoubleDown Interactive DDI as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Baker Hughes Co. BKR, Whiting Petroleum Corp. WLL and Continental Resources, Inc. CLR.
Here is a synopsis of all five stocks:
When it comes to investing, it's all about earnings. Stocks with the strongest earnings are the ones which will stand the test of time. You can sell investors on ideas, you can promise growth to Wall Street, but at the end of the day earnings will separate the real from the fake.
One way to find stocks with the best earnings profiles is to lean on the power of the Zacks Rank. Stocks with favorable Zacks Ranks have some of the strongest earnings trends. One such stock is today's Bull of the Day, Cabot. Cabot Corp. operates as a specialty chemicals and performance materials company. It operates through three segments: Reinforcement Materials, Performance Chemicals and Purification Solutions.
Cabot is currently a Zacks Rank #1 (Strong Buy) in the Chemical – Diversified industry which ranks in the Top 19% of our Zacks Industry Rank. The reason for the favorable rank is the series of earnings estimate revisions coming from analysts. Over the last sixty days, three analysts are increased their earnings estimates for the current year and next year. That bullish behavior has pushed up our Zacks Consensus Estimates for the current year from $5.80 to $6.50, while next year's number is up from $6.38 to $7.63. That represents growth of 29.48% for the current year and 17.44% for next year.
There has also been a ton of earnings surprises for the company recently. Over the last year, the company has beat earnings by an average of 19 cents or 16.17%. The stock has beat for seven consecutive quarters. Revenue growth is here too, with 24.37% revenue growth for the current year. That is set to die down to 5.8% growth for next year. Still, earnings are moving in the right direction as are sales.
In a market like this, you cannot afford to be caught in the wrong stock. It is tough enough to find profits on companies that are coming through with strong earnings, let alone those that have weak earnings trends. Miss a report and the market is going to pummel you. Keep moving your earnings in the wrong direction and you might never recover.
One way to find stocks with great earnings trends is to lean on the time-tested power of our Zacks Rank. Stocks with the best earnings trends will be in the good graces of our Zacks Rank. Stocks which have been struggling to deliver consistent earnings results will be the opposite.
Today's Bear of the Day is a stock that has seen some negative revisions coming from analysts all over Wall Street. I'm talking about Zacks Rank #5 (Strong Sell) DoubleDown Interactive. DoubleDown Interactive Co., Ltd. engages in the development and publishing of digital games on mobile and web-based platforms for casual players in South Korea. The company offers DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox, and Undead World: Hero Survival games. Its games are primarily distributed, marketed, and promoted through third party platform providers.
The reason for the unfavorable rank is the series of negative earnings revisions coming from analysts. Over the last thirty days, analysts have cut their earnings estimates for the current year and next year. The bearish sentiment has dropped our Zacks Consensus Estimates for the current year from $1.66 to $1.50 while next year's number is off from $1.93 to $1.74.
DoubleDown is in the Gaming industry which ranks in the Bottom 14% of our Zacks Industry Rank.
In its weekly release, Baker Hughes Co. reported that the U.S. rig count was higher than the prior-week tally. The rotary rig count, issued by BKR, is usually published in major newspapers and trade publications.
Baker Hughes' data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry. The number of active rigs and its comparison with the prior-week figure indicates the demand trajectory for Baker Hughes' oilfield services from exploration and production companies.
Total U.S. Rig Count Rises: The count of rigs engaged in the exploration and production of oil and natural gas in the United States was 733 for the week ended Jun 10. The figure is higher than the prior week's count of 727. The current national rig count is higher than the year-ago level of 461.
The onshore rigs in the week ended Jun 10 totaled 715 compared with the prior week's count of 710. In offshore resources, 15 rigs were operating, lower than the prior-week count of 16.
U.S. Oil Rig Count Rises: Oil rig count was 580 for the week ended Jun 10, higher than the prior week's figure of 574. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is up from the year-ago figure of 365.
U.S. Natural Gas Rig Count Flat: Natural gas rig count of 151 was in line with the prior-week figure. The count of rigs exploring the commodity is higher than the prior-year week's tally of 96. Per the latest report, the number of natural gas-directed rigs is 91% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 27 units, higher than the prior-week count of 25. Horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations, also known as shale formations) of 706 compared favorably with the prior-week level of 702.
Gulf of Mexico (GoM) Rig Count Declines: GoM rig count was 14 units, all oil-directed. The count was lower than the prior-week number of 15 units.
Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 344, higher than the prior-week count of 341. In the Eagle Ford, the tally for weekly oil drilling rigs was 59, higher than the prior-week count of 57.
The West Texas Intermediate crude price is trading higher than the $115-per-barrel mark, reflecting a massive improvement from last year. Higher oil prices will likely pave the way for rig additions despite a slowdown in drilling activities as upstream players mainly focus on stockholder returns rather than boosting output.
Meanwhile, investors may keep a close eye on energy stocks like Whiting Petroleum Corp. and Continental Resources, Inc. The companies are expected to benefit from the current healthy oil price scenario.
Whiting Petroleum is a leading upstream energy company and the top producer of crude oil in North Dakota. With oil prices improving rapidly, Whiting Petroleum is expected to continue generating handsome cash flows while maintaining a healthy balance sheet.
Headquartered in Denver, CO, Whiting Petroleum has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. Looking at the price chart, WLL has gained 77.7% over the past year, outpacing the 62.4% rise of the composite stocks belonging to the industry. WLL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Continental Resources is also a leading upstream energy company with proven reserves in North Dakota and Oklahoma. The oil inventories of Continental Resources are among the best in the industry.
Headquartered in Oklahoma City, Continental Resources has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. Considering the price chart, Continental Resources — currently carrying a Zacks Rank #3 — has gained 103.0% in the past year, outpacing the 62.5% rise of the composite stocks belonging to the industry.
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