CWEI Clayton Williams Energy, Inc.

Clayton Williams Energy, Inc. (CWEI) continues to trade like a rock star, currently pressuring its multi-year high as crude and nat gas stay bullish. With estimates surging and a compelling valuation, this energy stock is a momentum powerhouse.

As a domestic E&P (exploration/production), CWEI has a very strong correlation to underlying crude and nat gas prices. That dynamic and strong Q4 results from late February have shares of CWEI pressuring its multi-year high.

Fourth-Quarter Results

Revenue for the period was up 16% from last year to $89 million. Operating cash flow, a key metric when evaluating commodity companies, came in at $208 million, just about double from last year.

The company also looked solid in a number of other key categories, with proved reserves up 52% to 51 million BOE (Barrels-Oil-Equivilant). Clayton also did a great job of replacing the resources it extracted from the ground, with 452% of 2010 production replaced by reserve additions.

Estimates

We have seen some very bullish movement in estimates over the last few months on higher energy prices, with the current year up $1.85 to $8.78 and the next-year estimate up $3.91 to $11.34, a bullish 29% growth projection.

Valuation

But in spite of the strong profile and impressive gains, CWEI still have value, trading with a forward P/E of 12X, a sharp discount to its peer average of 23X.

12-Month Chart

On the chart, CWEI has seen some big gains over the last 6 months, recently hitting a new multi-year high on high energy prices and rising estimates. Look for support from the long-term trend on any weakness. Take a look below.