Will Crescent (NYSE:CPG) continue to grow in June?

Crescent Pt Energy is scheduled to announce its earnings today. The next earnings report is expected on the 29th of July 2021. Crescent Earnings Before Interest Taxes and Depreciation Amortization EBITDA are projected to decrease significantly based on the last few years of reporting. The past year's Earnings Before Interest Taxes and Depreciation Amortization EBITDA were at 1.25 Billion. The current year Average Equity is expected to grow to about 3 B, whereas Working Capital is forecasted to decline to (421.3 M). As many of us are excited about energy space, it is fair to digest Crescent Pt Energy as a unique alternative.
Published over a year ago
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Reviewed by Michael Smolkin

Crescent Pt Energy has 2.42 B in debt with debt to equity (D/E) ratio of 0.86, which is OK given its current industry classification.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Crescent has an asset utilization ratio of 8.46 percent. This indicates that the company is making $0.0846 for each dollar of assets. An increasing asset utilization means that Crescent Pt Energy is more efficient with each dollar of assets it utilizes for everyday operations.
Crescent Point financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Crescent Point, including all of Crescent Point's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Crescent Point assets, the company is considered highly leveraged. Understanding the composition and structure of overall Crescent Point debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Crescent Total Liabilities

Crescent Point Energy liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Crescent Point Energy has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Crescent Point balance sheet include debt obligations and money owed to different Crescent Point vendors, workers, and loan providers. Below is the chart of Crescent short long-term liabilities accounts currently reported on its balance sheet.
You can use Crescent Point Energy financial leverage analysis tool to get a better grip on understanding its financial position

How important is Crescent Point's Liquidity

Crescent Point financial leverage refers to using borrowed capital as a funding source to finance Crescent Point Energy ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Crescent Point financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Crescent Point's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Crescent Point's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Crescent Point's total debt and its cash.

Going after Crescent Financials

The latest price surge of Crescent Pt Energy could raise concerns from shareholders as the firm it trading at a share price of 4.40 on 1,630,356 in volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in June. The stock standard deviation of daily returns for 90 days investing horizon is currently 3.83. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Crescent partners.

Asset Breakdown

Total Assets8.94 Billion
Current Assets286.03 Million
Assets Non Current8.58 Billion
Goodwill219.31 Million
Tax Assets1.48 Billion

Our perspective of the latest Crescent surge

Latest downside variance is at 11.59.
As of the 12th of May 2021, Crescent shows the mean deviation of 2.9, and Risk Adjusted Performance of 0.0987. Crescent Pt Energy technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to interpolate data for nineteen technical drivers for Crescent Pt Energy, which can be compared to its rivals. Please confirm Crescent Pt Energy jensen alpha, and the relationship between the coefficient of variation and potential upside to decide if Crescent Pt Energy is priced correctly, providing market reflects its regular price of 4.4 per share. Given that Crescent has jensen alpha of 0.6788, we suggest you to validate Crescent Pt Energy's prevailing market performance to make sure the company can sustain itself at a future point.

Our Final Takeaway

Although some firms under the oil & gas e&p industry are still a bit expensive, Crescent may offer a potential longer-term growth to shareholders. While some shareholders may not share our view we believe it may be a good time to exit Crescent as the risk-reward trade off is not appealing enough to hold a position. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Crescent.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Crescent Point Energy. Please refer to our Terms of Use for any information regarding our disclosure principles.

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