Callon Petroleum looks to be beginning a turnaround as oil prices recover on news of continued coronavirus slowdown. Callon also reports earnings 7 trading days from now, so you've got the possibility of an earnings bump.
Callon is extremely undervalued at the current price, with analyst estimates of the company's earnings only rising over the last few weeks despite weak oil prices. That's partly because of Callon's cost reduction initiatives and its recent merger with Carrizo Oil and Gas.
This is one of the best PEG ratios in the market right now at 0.14, with potential to triple the share price within a year or two if it posts a few strong earnings reports. Ideally, I'd like to see Callon initiate a dividend to lift it to a higher multiple, but even without that, the stock has a fair amount of upside potential due to its low valuation.
Callon is extremely undervalued at the current price, with analyst estimates of the company's earnings only rising over the last few weeks despite weak oil prices. That's partly because of Callon's cost reduction initiatives and its recent merger with Carrizo Oil and Gas.
This is one of the best PEG ratios in the market right now at 0.14, with potential to triple the share price within a year or two if it posts a few strong earnings reports. Ideally, I'd like to see Callon initiate a dividend to lift it to a higher multiple, but even without that, the stock has a fair amount of upside potential due to its low valuation.
Comment:
Earnings were good, but CPE will follow oil down for as long as oil continues to go down. In other words, this is a good buy very long term, but probably not short term. I bought a $3.00 strike call expiring January 2021 for $0.45, and I'll be watching for opportunities to buy more calls for 2021 or 2022 at even cheaper prices.