Basic Materials

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Gevo GEVO Stock News

Gevo, Inc. (NASDAQ: GEVO)

Gevo is a company that I believe has incredible upside potential. One of the big reasons for this is the company’s green jet fuel. It is the first approved fuel on the market that is not derived from fossil fuels. Instead, it’s a corn product. The company recently saw its fuel being used in two Alaska Airlines commercial flights. Of course, with this news came quite a few questions about the fuel. Pretty soon, the company will be holding a conference call surrounding earnings. One of my friends on StockTwits reached out in hopes that I would ask Pat a big question that has to do with demand for the jet fuel GEVO created. Here’s the question:

Pratt & Whitney and GE have both perfected and produced jet turbines that are not only fuel efficient, they have cut emissions dramatically. They are being offered on most Boeing & Airbus new models as turbine options. Please ask Dr. Gruber if he foresees this impacting the use of isobutanol negatively. These new engines may impact the future of GEVO.”  A big thanks to VaporEyes69 on StockTwits for this question! And yes, I will do my best to ask Pat on the upcoming call!

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Will This Have An Impact On GEVO In The Long Run?

The truth is that no one can see the future, and I don’t pretend to be able to. Therefore, the effect that efficient turbines have on the company in the long run is unknown. However, in my opinion, this isn’t an issue at all.

Yes, Pratt & Whitney and GE have perfected efficient, low emission turbines. Yes, these turbines are already on the market. However, they are also far more expensive than the standard turbines offered. This comparison, alone, makes green jet fuel from GEVO the better option. At the end of the day, the fuel that is made from left over corn doesn’t come with a highly increased price. In fact, dependent on market conditions, it can be cheaper than standard jet fuel in many cases. So, on the cost comparison side of things, parsed as an either or question, jet fuel would be the better option.

Emission Reductions

If the goal of either using the new age efficient turbines or Gevo jet fuel is simply to reduce emissions and offer a green experience, the jet fuel takes the cake there too. While the new turbines are designed to reduce emissions, it’s hard to create a lower emission portfolio than what can be created when you move into the renewable space.

The One Thing These Turbines Have Over Jet Fuel

While, overall, I don’t believe that GEVO has anything to worry about with the more efficient turbines, there is one area where these turbines outweigh the benefits of clean jet fuel. That is in efficiency. Ultimately, flights could happen using less fuel overall. Of course, this plays a bit into the cost. However, the cost decrease from added efficiency would take quite some time to add up to the cost increase associated with the upgrade.

Even If All Airlines Started Buying These High End Turbines, GEVO Would Still Be In Good Shape

Let’s say that every airline in the world decided to ditch the old turbines and upgrade to the new, more efficient turbines tomorrow. Of course, the emissions released by these turbines would be reduced, and planes would be able to fly longer on less fuel. However, would that really steer them away from clean fuel, especially considering that this clean fuel comes at a comparable (if not lower) price? I don’t think so. The truth is that the new turbines can get the same efficiency using the clean fuel product offered by GEVO. Even with these turbines, airlines are better suited to using Gevo’s jet fuel from an environmental standpoint, which, of course, leads to a better brand in the eyes of consumers. So, at the end of the day, I don’t believe that efficient turbines are going to lead to headwinds for the company when it comes to selling their corn-based jet fuel!

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Barrick Gold Corp ABX Stock News

Barrick Gold Corp. (NYSE: ABX)

Barrick Gold is having an incredible day in the market today. Yesterday, the company reported its earnings for the most recent quarter. While earnings was a miss, and that was concerning to many, there are definitely plenty of reasons to be excited here. Today, we’ll talk about what we saw from earnings, what we’re seeing from the stock today, and what we can expect to see from ABX moving forward.

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ABX Reports Mixed Quarterly Results

As mentioned above, Barrick Gold reported its earnings for the most recent quarter yesterday before the open of the market. Unfortunately, the company didn’t exactly report what everyone seemed to be expecting. Here’s what we saw from the report:

  • Revenue – In terms of revenue, ABX didn’t do quite as well as expected. During the quarter, analysts expected that the company would report revenue in the amount of $2.07 billion. Unfortunately, however, the company only reported revenue in the amount of $2.01 billion for the quarter.
  • Earnings Per Share – While revenue was a miss, earnings were a bit more positive. During the quarter, analysts expected that the company would produce earnings in the amount of $0.14 per share. On the earnings report, we learned that ABX hit this nail on the head, reporting $0.14 per share.

What We’re Seeing In The Market Today

While weak revenue can put some resistance on stocks, that’s not what we’re seeing. In fact, investors are shrugging off the revenue miss and looking toward a strong future with Barick Gold. This can be seen from the gains we’re seeing in the value of the stock today. Currently (12:40), the stock is trading at $21.83 per share after a gain of $0.56 per share (2.63%) thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an incredibly bullish opinion with regard to what we can expect to see from ABX. First and foremost, let’s discuss earnings. While revenue was a miss, the report was positive overall. Earnings were on point, but a more important figure shows strong profitability! That figure is free cash flow. In fact, the second quarter showed the fifth consecutive quarter of positive free cash flow for the company. In the second quarter, the figure rose from $181 million to $274 million. That’s definitely a noticeable increase that shows incredible profit growth.

Another area where ABX is really showing promise is how fast the company is paying off its debts. At the end of the quarter, the company had $8.82 billion in total debt and $2.44 billion in cash and equivalents. Subtract the cash from the debt and we have a total debt load of $6.38 billion. This is a number that is sinking quickly. In fact, in the year 2015, $3.1 billion in debt had been paid off. This year, nearly $1 billion in debt repayments have been seen and another $1 billion is expected through the second half. As the company continues to pay down its debt, it also continues to put itself in a better overall financial position. Soon enough, the company will be down to the $5-billion-in-debt mark. This is a key mark, as $5 billion is the total amount of debt that the company has which matures after the year 2032. So, the debt picture is looking great!

Economic Concerns Remain A Big Factor For Growth

So, overall, the second quarter was great and points to a company that continues to strengthen. However, that’s not the only reason I maintain an overall bullish opinion on Barrick Gold. At the end of the day, the company’s flagship product is gold. So, when the price of gold climbs, profit heads upward as well. At the moment, gold is up, and likely to continue in that direction.

Gold is largely considered to be a safe-haven investment. As a result, when stock market and economic conditions are concerning, investors look to gold as a way to maintain the value of their money. Around the world, we’re seeing incredible economic struggles. While central banks continue to patch the issue by reducing interest rates, currency values are falling, leading to further safe-haven demand. All in all, I’m expecting this trend to continue for some time to come. As a result, I’m expecting to see further gains in the value of gold and, therefore, ABX stock.

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Whiting Petroleum Corp WLL Stock News

Whiting Petroleum Corp (NYSE: WLL)

Whiting Petroleum has been through the ringer for some time now. However, I’m starting to see stories published that say the stock is ready for a big pop upward. Somehow, we’re going to see this battered stock make it to support and climb dramatically. Personally, I think not! I did some digging and have come to the conclusion that WLL isn’t a strong investment at the moment. Today, we’ll talk about why.

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Understanding What WLL Does

Before we get into why I’m expecting to see declines on Whiting Petroleum ahead, it’s important that you understand how the company makes its money. As the name would suggest, the company is focused on the finding and mining oil and natural gas. Once the company produces the product, it sells the product on the open market.

With that said, I will say that WLL is a great company. The big problem, however, is that they have the right product at the wrong time. At the end of the day, because of the nature of the business, the company is heavily exposed to market spot prices. When these prices for oil and natural gas increase, the company earns more profit on its product. However, when these prices decrease, we can expect to see declines in profits for the company.

The Supply Glut Isn’t Getting Any Better

While some believe that the oil supply glut isn’t the primary cause of recent and oncoming declines in the price of the commodity, it is at least worth talking about. After all, WLL is heavily dependent on this commodity, and, at the end of the day, supply and demand lead to price movements.

With that said, the supply glut is no secret nor surprise at this point. In fact, we have been dealing with it for well over a year. The problem is that it’s not getting any better. There have been no agreements to reduce production or even freeze production at already inflated rates. Instead, we’re seeing increased production across the board. Just last week 15 new active rigs came on the scene in the United States alone. As supplies continue to grow, the law of supply and demand tells us that oil will continue to fall in price. That’s not a good thing for Whiting Petroleum.

Supply Isn’t The Only Problem

Many are focused heavily on supply. However, demand is a huge problem for the oil market at the moment, as well. We know that tough economic conditions lead to declines in demand for oil, and we know that global economic conditions are concerning, to say the least. That’s going to affect the demand for oil and, naturally, the bottom line at WLL.

Another big factor associated with demand was recently pointed out by Goldman Sachs. In fact, the investment bank believes that the larger reason for recent declines and more declines to come is the USD, and that does make sense. The USD is strengthening compared to most currencies around the world. Because oil and natural gas are priced using the currency, global prices are going up, causing further issues with demand. In fact, in a recent report, Goldman wrote the following:

Uncertainties on the near-term path of the oil market re-balancing have left the U.S. dollar as the primary driver to lower crude oil prices recently.”

The Bottom Line

At the end of the day, a company in the commodities sector can only do as well as the market allows. At the moment, the oil market and natural gas market is a tough place to be, and, unfortunately, WLL is likely to see further declines as a result of it. However, the bear oil market won’t last forever; at some point, this one will become a buy again!

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Chesapeake Energy Corporation CHK Stock News

Chesapeake Energy Corporation (NYSE: CHK)

Chesapeake Energy Corporation is a stock that was battered by energy sector blues. However, the month of July has been an exceptional one for the stock. If you got in at the beginning of the month, you’re likely sitting back and patting yourself on the back for the strong move you made. Well, I’m here to tell you that it’s time to abandon ship! Look at the chart below. The arrows represent the last 2 times that I wrote a post saying that it was time to take profits on CHK!

Chesapeake Energy Corporation CHK Stock Chart

The bottom line, here, is that the month of August isn’t going to be such a good one for the stock. In fact, I’m expecting it to be a horrible month. Today, we’ll talk about why.

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The Oil Market Is Taking A Beating, That Will Transfer To CHK

If you’re going to trade any stock, it’s important that you understand what the underlying company does to generate money. In this particular case, Chesapeake Energy is a company that is driven by oil. While oil doesn’t account for 100% of the company’s revenue, it does account for well over half of it.

Unfortunately, the oil market isn’t doing well and, if things keep going as they have been, it’s only going to get worse. At this point, all hopes of an oil production freeze are all but lost. On top of that, we’ve reached a pivotal time when oil production companies are working to take a more controlling share in the market. This can be seen in oil rig counts. In the United States alone, 15 new active rigs came on line just last week. As economic conditions continue to put a strain on demand, increased production is the last thing we need to see. Nonetheless, that’s what’s happening. If things keep going this way, oil is going to take another massive tumble, and companies like CHK will be struggling because of it.

Earnings Come Out Early Next Month

It can be argued that much of what we’ve seen from CHK over the past month has been unjustifiable growth. Think about it, the oil market isn’t getting any better, and we haven’t seen massive fundamental news from the company itself. Nonetheless, since June 30th, the stock has gained by nearly a quarter.

The reason for the gains are simple. Investors looked at Chesapeake Energy and saw a battered stock. Given that the stock had such a rough time, investors viewed it as an opportunity to get in at a very low price. From there, investor-fueled growth started to happen. This led us to where the stock is today. At the end of the day, CHK is currently an overvalued stock.

This brings us to earnings. On August 4th, the company will be reporting its results for the most recent quarter. Given conditions in the oil and natural gas market during this quarter, I’m not expecting to see much by way of positive news. Since the last earnings report, the company has shed 9% of its value. This time around, we’re likely to see more of the same. Unfortunately, CHK is simply in the right sector at the wrong time.

The Bottom Line

At the end of the day, Chesapeake Energy isn’t a bad company. In fact, years down the line, when the oil and energy sector recovers, I’m expecting that the stock will become a strong pick. However, at the moment, everything seems to be going against the oil industry. Given the current outlook on the energy sector, as well as the current global economic outlook, things simply aren’t looking good. This ship may sail again, but for now, it’s time to abandon CHK before it sinks again!

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AK Steel Holding Corporation AKS Stock News

AK Steel Holding Corporation (NYSE: AKS)

AK Steel had an explosive day yesterday after reporting its results for the second quarter. After a slight morning correction, the stock is back on the upward trend and remains well into the green. However, will these gains continue? Today, we’ll talk about what we saw from the earnings report, what we’re seeing in the market, and what we can expect to see from AKS moving forward.

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AKS Blows Away Expectations

As mentioned above, AK Steel reported its results for the second quarter yesterday. While revenue slightly missed the mark, earnings were overwhelmingly positive, leading to investor excitement. Here’s what we saw from the report:

  • Revenue – In terms of top line revenue, AKS slightly missed the mark. During the quarter, analysts expected that the company would generate revenue in the amount of $1.53 billion. However, the company actually generated revenue in the amount of $1.49 billion during the second quarter.
  • Earnings Per Share – While revenue did, indeed, miss its mark, AKS did incredibly well when it came to earnings per share. During the second quarter, analysts expected that the company would generate a loss of $0.02 per share. However, the company actually generated earnings in the amount of $0.08 per share. Proving to beat analyst expectations by $0.10 per share.

Following the release of the earnings report, Roger K Newport, CEO at AK Steel, gave this statement:

Our strategic decision to reduce exposure to commodity spot markets, optimize our footprint and focus on higher value products continued to show positive results as we achieved another quarter of significant improvement… We continue to make operational improvements and relentlessly pursue margin enhancements, and we are seeing the benefit of these actions in our financial results.”

How The Market Reacted To The News

As mentioned above, following the release of earnings, AKS exploded in the market. This morning, we saw a slight correction from overnight highs. However, the stock continues to head upward at the moment. Currently (1:03), the stock is trading at $6.60 per share after a gain of $0.42 per share (6.80%) thus far today.

Will These Gains Continue?

When it comes to AK Steel, I have a relatively mixed opinion of what we can expect to see moving forward. While we may see further gains in the short run thanks to the strong results, the long-run picture doesn’t look so good.

At the moment, AKS is working to reduce its exposure to commodity spot markets. However, as a company that primarily makes its money through the trade of steel, it’s impossible for the company to completely get rid of its reliance on the spot-market price. At the moment, and for some time now, steel demand is on the downtrend. In China, the world’s largest consumer of basic materials, demand is down. This is the same when we look around the world. Unfortunately, weak demand leads to weak prices. At the end of the day, AKS has quite a bit of headwind to get through here.

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Gevo GEVO Stock News

Gevo, Inc. (NASDAQ: GEVO)

If you’ve followed my work here or elsewhere, you know that I’m incredibly excited for the future of Gevo. Through incredible feats of innovation, this company has created a green jet fuel as well as isobutanol, a chemical that is added to gasoline for lower emissions. Soon, the company will be reporting its earnings for the most recent quarter. Today, we’ll talk about why this report is so important, what analysts are expecting, what I’m expecting to see, and what we can expect to see from GEVO moving forward.

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This Earnings Report Is Incredibly Important For GEVO

As mentioned above, the earnings report that will be released next Tuesday, August 2nd, is incredibly important for Gevo. The company has been facing a rough time as a result of NASDAQ listing compliance rules. You see, currently, the stock is trading at under $1 per share. In order to remain listed on the NASDAQ, the company needs to get the stock to this mark.

The good news is that, in many cases, earnings reports prove to be catalysts. While GEVO is currently trading at about half of the listing requirement, we know that, in the penny stock world, anything can happen. In this particular case, it is possible that strong earnings could be the catalysts that sends this thing skyrocketing right past the all important $1-per-share mark. After all, this isn’t the first time that we’ve seen a penny stock climb so high. In fact, on June 3rd, GEVO closed the day off at $0.34 per share. However, by the 8th, the stock closed at $0.96 per share before falling back down. If earnings prove to be exceptionally positive, the stock could rise past the $1-per-share mark and stay above the mark for some time!

What Analysts Are Expecting To See

According to NASDAQ, analysts are expecting to see a relatively positive quarter. During the release, it is expected that the company will report a loss of $0.15 per share. If this is, indeed, the case, it would represent yet another consecutive quarter of declining losses as the company nears the profit arena. In fact, this would be an exceptional year-over-year improvement from a loss of $1.23 per share reported just one year ago.

What I’m Expecting To See

In this particular case, I believe that analysts hit the nail on the head. As time progresses, GEVO has shown that it has a keen ability to reduce losses. At the moment, the company’s products are starting to hit the market, which is overwhelmingly positive. Also, while the energy sector isn’t perfect, we did see gains in the sector during the quarter in question. That’s a good sign for GEVO and the earnings report to come. In fact, it wouldn’t be surprising to see the company beat earnings estimates.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion with regard to what we can expect to see from Gevo. Before I delve into why my opinion is so bullish, I want to answer a very important question. Since my recent interview with the CEO of the company, I’ve received several questions from my visitors. However, through all of the phone calls, text messages, emails, and StockTwits messages, one question seems to be asked more than all of the others. That question is, “Do you think Pat was confident that the company will not get delisted?” Yes! Absolutely, 100%, no doubt about it. While no specific plans were offered, Pat did make it clear that the company is not going to let itself get delisted. I know that a reverse split is on the minds of quite a few, but we still have an extension and compelling reasons to see growth in the mean time. So, I don’t think that a reverse split will be necessary.

With that said, my bullish opinion on the stock goes far beyond my thoughts on delisting. With that off of the table, we can look at the most important factors. Factors like the fact that the company has seen its product used as fuel in two commercial flights.  The fact that Alaska Airlines has said that it would fly using Gevo fuels again. The fact that isobutanol is getting out there in a big way with Musket. The fact that isobutanol production can and will be scaled to meet demand. The bottom line here is that all of the facts are pointing to strong growth in the stock moving forward. At the end of the day, I’m expecting to see gains on GEVO.

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Stone Energy Corporation SGY Stock News

Stone Energy Corporation (NYSE: SGY)

Stone Energy Corporation is having an incredibly strong day in the market today, and for good reason. The company released estimated production data for the second quarter, and that data is building excitement surrounding the company’s earnings report that’s soon to come. Today, we’ll talk about the production announcement, how the market reacted to the news, and what we can expect to see from SGY moving forward. So, let’s get right to it…

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SGY Announces Estimated Q2 Production

As mentioned above, Stone Energy is having an incredibly strong start to the day, today, after releasing estimated production for the second quarter. During the quarter, the company said that it reached production of approximately 29 MBOE (174 MMcfe) per day. The production consisted of about 59% oil, 9% natural gas liquids, and 32% natural gas. This is incredible production for the company, as it proves to be slightly above the high end of guidance.

This is very important news for SGY and its investors, as it gives us a window to what we can expect from earnings. At the end of the day, if production is slightly ahead of guidance, we can expect the company to beat expectations with regard to earnings and revenue.

How The Market Reacted To The News

One of the first lessons that we learn when we get started in investing is that the news moves the market. At the end of the day, when positive news is released surrounding a stock, we can expect to see gains. On the other hand, negative news will lead to declines. In this particular case, the news surrounding SGY was overwhelmingly positive. So naturally, we’re seeing strong gains in the value of the stock today. Currently (12:27), the stock is trading at $13.72 per share after a gain of $1.76 per share (14.73%) thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have a relatively mixed opinion of what we can expect to see from Stone Energy. Throughout the remainder of this week, we’ll likely see a mixture of relatively flat movement as well as slow upward movement. This will likely be the result of investors excited about the data released today and waiting for a strong earnings report.

As mentioned above, due to the high production volumes, I’m expecting to see strong earnings. After all, SGY is in the business of producing and selling oil and natural gas. With more product to sell, the company likely earned more money. So, on Tuesday, I’m expecting to see excitement send the stock upward in a trend that could last a few days or even a week.

However, my long-term view is quite a bit more bearish than the short-term view. If you recall, on July 19th, I published a post explaining that we were in the midst of the calm before the storm and that SGY would likely take a dive. For the next several trading sessions, we saw declines. That is, until today.

The truth is that, while my short-term views have become slightly bullish, the long-term view is still very concerning. With an incredibly heavy debt load, poor conditions in the energy sector, and analysts giving bearish opinions ta-boot, I’m expecting to see further declines in the long run. So, if you’re going to play the Stone Energy game, consider playing the short game, and be very aware of the risks at hand in doing so.

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Freeport-McMoRan FCX Stock News

Freeport-McMoRan Inc (NYSE: FCX)

Freeport-McMoRan has a big day coming up tomorrow, and it’s one that I believe will be overwhelmingly positive. That’s because the company will be reporting its results for the second quarter before the opening bell tomorrow. Today, we’ll talk about what analysts are expecting to see, why I believe that analysts have missed the mark, what I’m expecting to see, and what we can expect from FCX moving forward. So, let’s get right to it…

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Analysts Aren’t Expecting Much Of A Positive Quarter From FCX

As mentioned above, Freeport-McMoRan will be reporting its earnings for the second quarter tomorrow before the opening bell. When it comes to analysts views, the report isn’t likely to be a very positive one. In fact, According to NASDAQ and based on 11 analysts forecasts, the overall consensus is that the company will produce a loss of $0.01 per share. This shows a massive decline from the gain of $0.14 per share realized in the same quarter last year, but strong growth from the loss of $0.16 per share realized last quarter.

I Believe That Analysts Have Missed The Mark

While I understand the relatively bearish views held by analysts, I have to say that I believe they’ve missed the mark in this case. The reality is that the second quarter was likely an incredibly positive one for FCX. You see, the company is focused on mining basic materials. The vast majority of its revenue comes from mining copper. The second quarter was a positive one for copper, as the Chinese economy started to see a boost, leading to higher demand from the world’s largest consumer of the metal.

In fact, through the company’s entire product portfolio, oil, which accounts for a very small percentage of revenue, is the only product that didn’t have a strong quarter. With that considered, I’m expecting that the revenue from the company’s sales will top expectations, leading to positive earnings and exciting investors.

What I’m Expecting To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from FCX. The company has faced a hard time over the past year as the prices of commodities continued to fluctuate. However, in the second quarter, we saw quite a bit of strong news surrounding copper and gold. Between the two, these commodities make up about 70% of the company’s total revenue. Considering the strong news surrounding the products sold by Freeport-McMoRan, I’m expecting incredibly strong results this quarter. As a result, we should see strong movement in the market tomorrow and in the short run.

Also, in the long run, my opinion remains relatively bullish. While FCX may run into headwinds as global economic concerns continue to shake and shape the market, in the long run the company is well positioned for solid growth. Copper and gold are likely to continue heading upward for some time to come. The excess gains on these commodities will likely act as a hedge to the slight losses the company might see in the oil segment. All in all, things are looking great for FCX moving forward.

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Southwestern Energy Corporation SWN Stock News

Southwestern Energy Company (NYSE: SWN)

Southwestern Energy Company is having an incredible trading session today, and for good reason. The company reported its earnings for the most recent quarter, beating expectations. However, there was some bad news in the report when it comes to revenue. Nonetheless, today we’ll talk about what we saw from the report, how the stock reacted to the news, and what we can expect to see from SWN moving forward.

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SWN Reports Q2 Results

As mentioned above, Southwestern Energy is having a strong day in the market today after producing strong earnings. While earnings were indeed a hit, the company missed expectations with regard to revenue. Here’s what we saw from the report:

  • Earnings Per Share – When it comes to earnings per share, SWN definitely did not disappoint. During the second quarter, analysts were expecting that the company would report a loss of $0.10 per share. However, the company reported that during the second quarter, it produced a narrower loss of $0.09 per share.
  • Revenue – In terms of top-line revenue, SWN didn’t quite fare as well as it did with regard to earnings. During the second quarter, analysts were expecting that the company would generate revenue in the amount of $534.4 million. However, the company actually reported that, for the quarter, revenue came in at $522 million.
  • Guidance – While earnings were a hit and revenue was a miss, the tie breaker here was guidance. Southwestern Energy increased production guidance for the year 2016 by 45 Bcfe, or 5%, to 865-875 Bcfe, from earlier guidance of 815-835 Bcfe.

While revenue for the quarter was a miss, the earnings report was positive overall. This positive data was followed up by SWN CEO Bill Way with the statement below:

As promised, we took significant and deliberate steps this quarter to strengthen our balance sheet that, when combined with the continued outperformance by our assets, positions us to reinitiate drilling and completion activites and accelerate our path to value-adding growth…”

How The Market Reacted To The News

Although revenue for the quarter was a miss, investors are overwhelmingly excited about the report. With strong earnings and the company guiding toward increased production, investors are viewing the report as positive. As a result, we’re seeing strong gains in the value of SWN today. Currently (2:16), the stock is trading at $14.42 per share after a gain of $1.22 per share (9.24%) thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have a relatively mixed opinion of what we can expect to see from Southwestern Energy. In the short term, investor excitement could push this thing higher. However, the increased guidance on the earnings report points to big issues that the company is likely to face in the long run. It seems that investors are forgetting that the oil industry is struggling at the moment. With a supply glut in place, demand simply isn’t adding up to big dollars for the industry any more. However, more and more, we’re seeing companies like SGY working to increase production. If this production increase continues, we’re going to see big declines in oil. This will ultimately equate to declines in the value of the stock. So, there’s a double-edged sword here. Is there money to be made now? Sure. However, if you’re going to get in on this one, make sure you’re cautious and watch the oil price very closely.

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Chesapeake Energy Corporation CHK Stock News

Chesapeake Energy Corporation (NYSE: CHK)

Chesapeake Energy Corporation has been a very interesting stock to watch. While the stock has struggled for some time now, some seem to think that we’re reaching the bottom and that it will pop back up. This is creating a ton of volatility. Now, let’s get one thing straight, I will not say that CHK is a strong investment opportunity. In fact, I believe the exact opposite. However, there are some opportunities that are going to be incredibly profitable for the day trader. Today, we’ll talk about why I don’t believe that the stock is a strong investment opportunity as well as why it presents strong day-trading opportunities.

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CHK As A Long Term Investment… Bad Move!

First and foremost, lets address the idea of Chesapeake Energy as a long-term investment. At the moment, this just doesn’t seem like a good idea. The reason for this is simple, it lies in the company’s product. The company is focused on the exploration, drilling, and sales of oil. As a result, it is highly susceptible to movements in the value of oil. When the value of oil goes down, the profits the company makes from its flagship product decline.

Now, take a look at the oil market. Unfortunately, conditions are far from positive. For more than a year now, we’ve been dealing with a supply glut that has had the commodity trading at incredibly low levels. While there is hope that oil will start to gain in value soon, it doesn’t look like this is going to happen any time soon. As a result, low oil prices will likely keep CHK on a trend downward.

Will The Stock Ever Be A Good Long-Run Investment?

The truth is that no one can see into the future, and I’m not going to pretend to be able to. However, I can say that I do believe that CHK will be a good investment one day, just not any day soon. While oil continues to be surrounded by uncertainty, this one remains very risky. However, oil won’t stay low forever. When a recovery does happen, there will be huge long-run gains to be made here. Nonetheless, you don’t have to wait for strong opportunities. There are plenty at the moment!

This Is A Great Stock For The Day Trader

While Chesapeake Energy’s long-run outlook isn’t great at the moment, there are tons of opportunities surrounding the stock in the short term. These opportunities are great for day traders. The truth is that trading CHK can be much easier and much more profitable than many other stocks.

When it comes to Chesapeake Energy, the stock is highly dependent on the value of oil, which is what has caused quite a bit of volatility in the stock as of late. When the value of oil starts to drop, we see declines in the price of the stock. Adversely, when the value of oil is headed up, we’re seeing gains in CHK.

As a result, a great way to play this one is to watch oil. When you get started for the day, take a look at the oil market to see if things are going up or down. If oil is falling, it’s a good day to ignore CHK. However, if oil is gaining, it’s likely a good time to buy. Then, sell the shares at the end of the day and take your gains as more declines are likely on the way.

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