Which Big Oil Stock has the Strongest Earnings Trends?

February 16, 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’).

Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!

Here’s your Cheat Sheet to how the top 5 Big Oil stocks rank via earnings trends:

Talisman Energy Inc. (NYSE:TLM): Current Price $12.41

Fiscal Year	2007	2008	2009	2010	2011
Revenue ($) in millions	7,412	9,257	5,711	6,712	8,194
Diluted EPS ($)	1.85	2.64	0.40	0.60	0.38

Between 2008 and 2011 revenue at Talisman Energy is down by nearly 12%, but EPS is off by almost 85% in that period.

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

Quarter	Sep. 30, 2011	Dec. 31, 2011	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012
Revenue ($) in millions	1,956	2,082	2,115	1,869	1,722
Diluted EPS ($)	0.24	-0.11	0.28	0.19	-0.71

We also note that sales are down substantially after March 2012, and EPS took a sharp dive into the red in that latest quarter there. We’ll avoid this one…

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