Which 5 Top Natural Gas Stocks Have the Strongest Earnings Trends?

March 01, 2013

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Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how these top 5 natural gas stocks rank via earnings trends:

Chesapeake Energy (NYSE:CHK): Current Price $19.61

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	11,630	7,702	9,366	11,640	12,320
Diluted EPS ($)	0.93	-9.57	2.51	2.32	-1.46

Though revenue has grown at a nice clip at Chesapeake, EPS is too bouncy for our liking, and we are also worried about that big negative number in 2012.

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter	Dec. 31, 2011	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012
Revenue ($) in millions	2,728	2,419	3,389	2,970	3,539
Diluted EPS ($)	0.73	-0.11	1.29	-3.19	0.39

But Chesapeake seems to have got it right in December 2012 after reporting a sharp jump in top-line and EPS. We’ll keep it on our list for now…

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