NEW YORK (TheStreet) -- As hard as it may be to believe we are already moving past July and into August, the clock keeps ticking, but earnings season is still hot. With almost 500 companies confirmed to report on Monday, I picked the stocks most likely to influence the market on Monday Aug. 6.
Chesapeake Energy (CHK)
Who They Are: The company was founded in 1989 and is based in Oklahoma City, Okla. Chesapeake trades an average of 21.2 million shares per day with a marketcap of $12.2 billion.52 Week High: $34.35
52 Week Low: $13.55
Book Value: $24.95 Chesapeake is expected to report abysmal second-quarter earnings after the market closes on Aug. 6. The consensus estimate is currently 7 cents a share, 69 cents (90.8%) lower from 76 cents during the same period last year. Analyst opinion is mixed with this company. Most of the analysts surveyed don't believe a buy or a sell is currently warranted. Right now, Chesapeake has 11 buy recommendations out of 27 analysts covering the company, 15 holds, and one lone analyst recommends selling. The trailing 12-month price-to-earnings ratio is a respectable 8.2; however, the mean fiscal-year estimate price-to-earnings ratio is 48.2, based on earnings of 38 cents per share this year. Shareholders receive 35 cents annually in dividends. The yield based on a recent price is 1.9%. Examining the history of a company is a great way to help understand what should be expected as we move forward. In the last three years, the average dividend paid per year was 28 cents. Over the last five years, the dividend has grown by an average of 1.7% per year. Shares have traded slightly lower in the last month of trading. Shares are about breaking even at 0.8% less than a month ago. In Chesapeake's previous earnings release on May 1, the closing price was $19.60. In comparison to a recent price of $18.70, shares are down 4.6%. Investors previously have been rewarded with an increase of year-over-year revenue. Revenue reported was $11.64 billion last fiscal year compared to $9.37 billion in the previous year. The bottom line has falling earnings year-over-year of $1.57 billion last fiscal year compared to $1.66 billion in the previous year. Short interest over 10% should give pause to investors looking at this company. The current float short is 12.76%. United States Natural Gas Fund ETF UNG (UNG) tracks natural gas prices and is able to provide an easy equity-based ticker to track the price of natural gas. UNG bounced off the lows placed in April. Forecasts for high temperatures and expanded electric use boosted UNG and natural gas prices higher. While too late for Chesapeake's reporting quarter, the higher energy prices, should give guidance a spring in its step. Low UNG prices have impacted more than Chesapeake's stock price. Sandridge Energy (SD), Cheniere Energy (LNG), and Devon Energy (DVN) have all watched their share price drop from the fallout with UNG. SandRidge's earnings release is expected after the market closes on August 02, 2012. The Analyst's mean appraisal is presently 1 cent a share, a gain of 1 cent from zero during the corresponding quarter last year. Cheniere Energy's earnings release is after Chesapeake's release, so no help from a miss or beat point of view, but at least we can look to see what is expected. The average analyst estimate is for a loss of about 19 cents per share. Devon Energy's earnings release is planned before the market opens on Aug. 1. The consensus estimate is currently 81 cents a share, backsliding 90 cents (52.6%) from $1.71 during the matching period in the previous year. By watching the earnings and guidance for SandRidge and Devon, we are able to achieve greater clarity for the space. In turn, we should have a greater appreciation for what to expect out of Chesapeake's report. The drop in UNG has impacted more than natural gas companies. UNG is so cheap that natural gas displaces coal for electric power production. I believe it's a real shame that natural gas is used for normal electric power generation instead of powering cars and trucks. We could be paying about $2 a gallon at the pump right now if America went in the direction of natural gas instead of electric vehicles. Alpha Natural Resources (ANR) is a coal company that like many coal miners, is experiencing lower coal demand and prices. Shares of Alpha Natural Resources have lost over 60% of their value since low UNG prices displaced coal in a major way. What makes Alpha Natural Resources and other coal miners important to Chesapeake investors is coal places a soft lid on UNG prices. As UNG moves higher in price, coal becomes more attractive and will lower demand for UNG/natural gas. If you're going to invest in natural gas and or coal miners, you will want to keep an eye on the other.
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