Gulfport Energy: New Gusher Bodes Well For This Fast Growing E&P Stock

| About: Gulfport Energy (GPOR)

Gulfport Energy (NASDAQ:GPOR) has had several positive catalysts to report this week. This fast growing E&P company looks poised to continue to produce positive results, and the stock offers a compelling entry point at these price levels as well.

Recent Positives for Gulfport:

  • The company just announced that the second well in the company's Utica Shale acreage had an initial production of over 1,500 barrels a day compared to just over 400 barrels a day on its first well.
  • The company also announced none of its facilities were damaged by hurricane Isaac.
  • Sidoti initiated the shares on Wednesday as a "Buy" with a $37 price target.
  • Stern Agee also just reiterated its "Buy" rating and $38 price target on the shares.

Gulfport Energy Corporation engages in the exploration, development, and production of oil and natural gas properties. Its principal properties are located in the Louisiana Gulf Coast, in west Texas in the Permian Basin and in western Colorado in the Niobrara Formation as well as leasehold interests in the Utica Shale in eastern Ohio.

(Business description from Yahoo Finance).

Four reasons Gulfport has more upside from $27 a share:

  1. Analysts had already expected 25% revenue growth in FY2012 and over 30% sales increases in FY2013. This was before the blowout results from its latest well in Utica. It has a minuscule five-year projected PEG (0.25).
  2. Given the company's exploding revenues, around 13 times forward earnings is a cheap price to pay for this growth stock.
  3. The company has more than tripled operating cash flow over the last three years. As long as oil prices stay at these levels (over 90% of production is oil), I would look for OCF to continue to increase at a good clip.
  4. The median price target of the 11 analysts that cover the stock is $34 a share. I would look for that target to move up in the coming weeks based on these well results. Four analyst firms have upgraded or initiated the shares to "Buy" or "Outperform" in 2012 so far.

Disclosure: I am long GPOR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.