On Jan 12, 2017, Zacks Investment Research upgraded Bellatrix Exploration Ltd. BXE to a Zacks Rank #1 (Strong Buy). Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of significantly outperforming the broader market.
Why the Upgrade?
Bellatrix Exploration recently came up with the capital budget for 2017. The estimated budget of $105 million is likely to drive production growth by 10%. The company also expects the yearly fund flow from operation to double with the increase in production.
The company’s improved expectations are supported by improving commodity prices. The decision of both OPEC and non-OPEC players to limit crude output in order to recover oil prices has started to bear fruit. Hence, the company anticipates to generate substantial cash flow for the shareholders as it would be able to sell the increased production for this year at much higher prices.
Bellatrix Exploration’s recent price chart also shows strength. During the prior three months, the company gained 0.35%, whereas the Zacks categorized Oil & Gas-Canadian Exploration & Production industry slipped 0.08%.
Despite the crude weaknesses last year, the company managed to surpass the Zacks Consensus Estimate in three of the last four quarters with an average earnings beat of 15.21%. Additionally, the Zacks Consensus Estimate for Bellatrix Exploration’s 2016 results narrowed from a loss of 31 cents to a loss of 28 cents over the last 90 days.
Other Stocks to Consider
Other well-ranked stocks in the energy sector include Imperial Oil Limited IMO, Suncor Energy Inc. SU and Newfield Exploration Company NFX. Both Imperial Oil and Suncor sport a Zacks Rank #1, while Newfield carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Imperial Oil is undervalued, as revealed by its forward PE ratio of 17.8 compared with 140.3 for the broader industry.
Suncor posted an average earnings surprise of 40.55% in the last four quarters.
Newfield surpassed the Zacks Consensus Estimate in three of the last four quarters with an average earnings surprise of 754.83%.
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