Petrohawk Energy Corp. (HK)
Jun
5
Written by:
6/5/2008 10:39 PM
Petrohawk Energy Corp. (HK)
Clearing its
previous high for the year, Petrohawk Energy ran up 11.35% today to close at $34.82.
This Houston
based developer, producer, and distributor of oil and natural gas jumped on an
upgrade by Lehman Brothers.
Trading
over 2.5 times its normal volume, Petrohawk is a good company that couldn’t have
had a better day, a pre-market upgrade on a day when crude oil recovered 5%
from a recent decline with the overall market moving 1.75% higher. I like the company
but would wait for a 2 dollar pull back before stepping in. If you could
predict a similar period where both the market and oil rally, this stock would
be a very nice vehicle to ride that movement.
The company
has 30% earnings growth expected for the current quarter and roughly the same
for next quarter. Sales growth of 21.7% estimated for the quarter ending in
September 2008. The stocks current price/earnings ratio, 366.53, shows just how
ahead of itself it is. Its forward P/E is a more reasonable 31.37. The stock
has moved 121% over the past 52 weeks while the S&P 500 has declined 6% in
the same time frame.
Another
bullish sign in addition to the price action of the stock is the strong volume
of the July Calls. Investors traded the 30, 35 and 40 July strike prices at
well above normal levels today, anticipating a move higher within the next 6
weeks.