Kendell,
Yes, I noticed that in First Call and Zack's one analyst had given an estimate of $1.53 for the year; however he/she hadn't submitted an estimate for the quarter--I Emailed First Call stating that if he/she is saying $1.53 for the year, that means the analyst believes that CWEI is going to earn 0.57 this quarter. First Call did get back to me and are looking into it. All of the new estimates should be in to First Call and Zack's within two weeks. In the meantime I am trying to get the Investors Business Daily to post the interim average $1.25 annual estimate that both Zack's and First Call presently have. I Emailed IBD--the phone call didn't work. Did you notice the price for Natural Gas today $3.65 versus the $2.62 in the third quarter.
For those of you who haven't followed this thread I post the following:
Clayton Williams Energy (CWEI) is an Oil Exploration and Producer who operated at a loss last year, but has had three very good quarters in a row and is on its way to a resounding fourth quarter which should take it from a negative P/E to a P/E of 10 at today's stock price of 15 1/4.
Currently the Investors Business daily has the estimate for the quarter at 0.29 and for the year at 0.85. Clayton Williams Energy (CWEI) has already earned 0.96 in the first three quarters of 1996 and this quarter looks exceptional. The new estimates, currently being compiled, will bring the consensus for the quarter to 0.45 and for the year to 1.45. The average Oil Exploration & Producer sells at 27 x EPS, or at 7.6 x CFPS.
The following table can provide an idea of the earning potential for CWEI for this quarter:
****************Oil Price* Sold* Gas Price* Sold* CWEI earnings
1996 First Quarter** $18.78*** 480K*** $2.29*** 1472K** 0.19
1996 Second Quarter* $19.38*** 598K*** $2.53*** 1354K** 0.32
1996 Third Quarter** $21.12*** 521K*** $2.62*** 1367K*** 0.45
1996 October average* $24.75*** ?***** $2.70 ?
1996 Today********* $24.00**** ?***** $3.65****** ?
A 10% increase in the price of oil and gas creates a 25-30% increase in the earnings.
Zack's and First Call recently received an earnings estimate of $1.53 for the year; that's indicating earnings of 0.57 for this quarter. The fourth quarter will change the past years earnings from what is now (-0.82) to a positive $1.50 or better, and go from a negative P/E to a P/E of 10 at today's stock price: 15 ¬.
Rodman, Renshaw and Hanifen, Imhoff are supposed to have their new estimates within two weeks.
CWEI's cash flow through the first three quarters was $3.55 and will approach $5.00 for the year.
On Nov. 14, 1996, CWEI did a Secondary Offering of 1.25M shares, underwritten by Rodman, Renshaw and Hanifen, Imhoff, bringing the total number of shares outstanding to approx. 8.9M. When news of the upcoming Secondary Offering was released the stock quickly increased in value from 10 to 13. The offering was oversubscribed to (this hasn't been announced yet and it appears the Underwriters have exercised their options for the additional shares). Of the 8.9M shares, 46% are owned by management, and an estimated 40% by institutions, leaving the public float at approx. 1.25M shares. CWEI is thinly traded and tightly held, the stock will move up on light trading volume (once the high volume of the secondary offering subsides). |
