REPX is active in the Permian basin, with over 65% of its production oil based. Recently reported earnings showed the company increased earnings despite challenging commodity prices as production increased for liquids and natural gas side as new processing capacity came on line. It trades at 6x earnings, 1.5x book, and supports a 25% ROE. We like that cash reserves are growing, while long term debt is retired. The dividend is backed by a payout ratio under 25% of cash flow. We recommend setting a stop-loss at $27, looking to achieve $46 -- upside potential over 25%. Yield 4.0%
Our PAST TOP PICK with REPX has triggered its stop at $27. To remain disciplined, we recommending covering the position at this time.