Opinions
Josef Schachter
InPlay Oil Corp
IPO-T
TOP PICK
Oct 09, 2018
Stock price when the opinion was issued
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IPO is a small cap oil and gas company. It is down about 10% over the last year, but has been trending up year-to-date. IPO also pays out a high yield at 7.7% and is cheap on a forward price-to-earnings basis at 7.6x. Revenues have been on the decline in 2023 while revenue and EPS have both missed forecasts for the last three quarters. The company has no cash but also minimal debt on its balance sheet with a debt-to-equity ratio of 0.15x. IPO pays out around 16% of its cash from operations in dividends over the last twelve months which is high, but attractive for income. We would say it is a good option tied to the price of oil and it offers investors an attractive income investment while being cheap on a forward earnings basis as well. We would say it is a moderate buy for oil and income exposure.
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They are in the Cardium formation. They sold a non-core asset and will use the proceeds to accelerate their Cardium program. He expects production to rise from 4900 to 5100 boe by the end of the year. Cash flow this year was about 53 cents. The balance sheet is in good shape. His 12-month price target is $3.60. Yield 0%.(Analysts’ price target is $2.92)