Pyramid Oil: Small Stock, Big Growth

A stock that has been making me a lot of money recently and is a stock you should be watching is a small stock not many know about. Pyramid Oil Company (PDO) is engaged in the exploration and development of crude oil and natural gas primarily in California.

When I go long stocks, I demand major growth, and I have that here. However, this is not the most safe position. Making sure that your style matches this style is very important before going long this gem.

Growth is the most important thing for me as EPS and sales growth have proven to be the major driver behind the best stocks ever. When it comes to EPS and sales growth, PDO has it covered. EPS growth has been 89%, over 999%, and over 999% the past three quarters. Sales growth has been 1%, 49%, 61%, and 92% the past four quarters.

This growth gives it a steady EPS growth rate of 39% with a P/E ratio of 29, which is in the mid range of the 3-50 zone of the P/E level the past five years. However, P/E ratio has never proven to correlate to history's biggest winners. EPS and sales growth have proven to be more important.

Other areas that light up a major interest for me about this stock is that management still owns 63% of the shares outstanding, which means that they are still highly invested in this company and expect higher growth. Even though there is only one mutual fund involved in the stock currently, I am sure that as the growth continues to increase we will see a lot more funds get involved in this high quality stocks.

The ratings in IBD are incredible with a 97 EPS rating, 99 group RS rating, a 99 RS rating, an A for SMR (sales, profit margins, and return on equity), an A for accumulation/distribution, a 99 for composite rating, and an A for timeliness rating. It simply doesn’t get any better than that.

I already have a 98% gain in the stock from my first purchase, but I do want to buy more of this stock and will pick up more if it can either create a base lasting five weeks and then break out on huge volume, or if it can pull back to the 50 day moving average and then bounce on strong volume.

Even though I use technical analysis (click to enlarge image) to make my actual purchases, you are more than welcome to tackle the stock any way you like. I am just bringing to your attention a potential future monster stock. Fundamentals account for 80% of the reason for me to go long a stock, but I have found technicals are best for me when deciding to actually take the trade.

Disclosure: I am long PDO.

 

Comments

[User 17459]

awesome.
look at that chart, how does one find this in the first place?

[MauiTrader]

I found it 121% ago. This was an easy find. It is a buy here at the support or if you can get it off the 50 DMA, the 50 DMA.

This is not rocket science. Don't make it harder than it is.

Also, SA did not post MY CHART. It is not nearly that parabolic and I already have a 121% gain so obviously it isn't "too hard."

I did mention that it needed to base to be safer. This is one to watch for a long time. This is not a hit and run, unless sellers come out in force. The stock was up 11% AFTER I WROTE THIS COLUMN THIS WEEKEND.

So not sure why we can't find a place to enter but I hope this helps.

All my buys, sells, partials are posted at my site. EVERYTHING is disclosed BEFORE I place ANY orders.

[Market Speculator]

safer play? do you suggest I where elbow and knee pads? PDO is in a much better position to move higher than PBR. Study the biggest stock market winners since 1890 and you'll find that PBR is not setting up like PDO is...just take a look at the EPS growth...why fight history?

[johnknox]

Good article, agree with columnist and the Market Speculator on value of PDO over PBR which I owned as part of a Heebner Fund.

[J.B.]

Wow. This is a great article. Wish I knew about PDO earlier! Thanks for the heads-up. Really clear and well-written. I will try to jump into this stock when there is an opening. Thanks again.

[Market Speculator]

How safe is PBR?

[Opportunist]

Way, way overextend and parabolic. Shorted at around 40 and it's 32ish now. I think it will go to the 20's.