Opinions
Jim Huang
SandRidge Energy
SD-N
DON'T BUY
Mar 07, 2013
$5.820
Stock price when the opinion was issued
oil
gas
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.
SD is a $520.5M company with a revenue base of $254M, almost no debt, strong free cash flows over the past few years, and has been building up its cash balance to now $255.7M. The stock is cheap, it does not pay a dividend, and insiders own 1%.
Fundamentally, it looks good here, although a lot will depend on the oil market, and any downside shock in the price of oil can cause its cash flows to turn negative.
Its balance sheet and cash position are strong enough to withstand a bad market, and so we would consider it a good value play.
Investors should be mindful of position sizing and the risks due to its smaller size.
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oil
gas
Was focused on natural gas but are now spending most of their time on oily assets. Have a few notable plays which recently had an upturn. A little disconcerting as the play was more natural gas than oil. Has been underperforming for the last few years and they have too high of a debt load. Feels that a management change would be in order.