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  • Bellatrix Exploration Is A Strong Buy At Current Price [View article]
    A $750 million shelf - that's quite an elephant for a company with a market cap of $1.3bn.

    By the end of October, when the massive QE punch bowel is taken away, and considering the IEA's intimation yesterday of lower oil prices ahead because of an emerging global oil glut, we'll see a lot of deeply undervalued oil plays come onto the table. BXE may already be a reasonable value play, I suspect it is. However, considering the severe headwinds we're about to face, that markets are richly valued and haven't reflected the big risk associated with ending QE, and considering the value that is likely to be on offer at that time especially with lower global oil prices, against all this the current risk-reward picture suggests a strong dose of caution be adopted. October should then represent a real buying opportunity with a much improved risk-reward profile and lots of excellent value to chose from.
    Aug 13 06:34 AM | 5 Likes Like |Link to Comment
  • Penn Virginia: The Correction Creates An Entry Point [View article]
    Great article. Thanks for sharing.
    Aug 5 06:46 AM | Likes Like |Link to Comment
  • PDC Energy - Is Selling Overdone? [View article]
    Yes, agree, high beta to WTI, I simply forgot to note it. Unfortunately, it's being widely reported that the global oil market is not just fully supplied, but over supplied, at the moment. Therefore, aside from short-term spikes from saber rattling in the Middle East, there is likely to be on going downward pressures for a while until supply is taken off the table. I don't see it as calamitous - surely the Saudis would reduce output if Brent falls below $100 - and the situation may bottom out within a couple of months, which again brings us back to October. Overall, October is shaping up to having a confluence of negatives - lower oil prices, inflation talk, the 10-yr moving higher, end of QE, worrying vocal dissent within the Fed, wall to wall scare talk in the media - and I see the recent market wobble as a prelude to a bigger shake up in October (not a crash). Let's see.
    Aug 5 01:57 AM | 1 Like Like |Link to Comment
  • PDC Energy - Is Selling Overdone? [View article]
    Once in a while it's good to get a lucky bounce. Usually, according to the ever-reliable Murphy's Law, they seem to go the other way.

    I've lightened up today because the gains have been better and quicker than expected, there's no point in being a hero on this market and I suspect we'll get more volatility - perhaps a more serious bout - in October when the taper ends, only two months to go now.
    Aug 4 04:54 PM | Likes Like |Link to Comment
  • Lynden Energy - Unknown Permian Basin Pure Play Could Triple [View article]
    Without doubt LVL has upside potential, no argument there.

    However, considering the companies used as a comparison are invariably large companies that are investible in the eyes of a broad spectrum to investors, and that LVL is a penny stock that can only attract an incomparably smaller investing audience, it is inevitable that it should carry a valuation discount.

    Second, LVL's average number of shares traded is very low, even miniscule on the US exchange. As such it's impossible to buy into a significant position, or to exit it, without trading against oneself. Further, in times of market volatility the volumes typically all-but dry up completely thus preventing a shareholder to exit a position in order to take advantage of some other great opportunity elsewhere. Being locked-into a position whilst great opportunities pass by isn't fun.

    Third, companies used as a comparison such as ATLH, FANG etc are growing production at a tremendous clip. They have the size, negotiating power and technical know-how to continue this, they have the financial wherewithal to do so and their 2015 financial estimates incorporate very strong growth. These forward estimates are very important because, ultimately, investment is about the future, not the past. LVL, on the other hand, seems set to continue growing at a much lower pace based on past performance. Given the significant disparity in growth rates it would be useful to have included valuation metrics for 2015. No doubt the valuation gap as presented would be much reduced on this basis.

    For sure LVL has a valuation gap. However, I think the true valuation gap is much smaller than that shown. And, if we get a volatile summer, as many are predicting as we head towards the end of QE and a period of rising interest rates, then many investors will have a general reluctance to get caught in illiquid micro stocks such as LVL. In volatile times daily share traded liquidity typically decreases rather than improves as the article suggests.

    Still, I do think that stocks such as LVL can offer small investors some good upside potential so long as they know the restrictions and risks and so long as they know how to play upcoming market volatility to their advantage rather than being on the wrong side of it.

    I wish you well with your investment.
    Aug 2 07:54 AM | 8 Likes Like |Link to Comment
  • Commodities Today: Potential Mergers And Acquisitions, Spin-Offs And Production Affecting These Stocks [View article]
    As a shale oil investor, I read it as good news that XOM, one of the super-majors in the conventional space, had falling production. Falling production globally from this group is helping to create space for the shale producers to continue ramping production with positive consequences for their earnings and share prices.
    Jul 31 12:56 PM | 2 Likes Like |Link to Comment
  • Buy Into Black Gold, Now And For The Long Term! [View article]
    Good article but surprised you didn't recommend buying US shale oil, the returns on capital are significantly better than those of US integrated oil.
    Jun 27 10:08 AM | Likes Like |Link to Comment
  • Is Stage Set For Markets To Again Be Smarter Than The Fed? [View article]
    I think it's; "Always look on the bright side of life".
    Jun 21 05:33 AM | 1 Like Like |Link to Comment
  • Lightstream Resources - The Scale Of The Balance Sheet Makeover May Surprise The Market (In A Good Way) [View article]
    Of course I can do these things Devon. However, it's you that's advocating this stock and you should know not to expect others to do fundamental work for you which you should have already done as a normal part of due diligence. If you have NOT already done this work it might help explain why you're running a big loss. On the other hand, if you have done this basic fundamental work please share it, I'm genuinely interested in reading it.
    Jun 20 04:05 PM | 2 Likes Like |Link to Comment
  • Lightstream Resources - The Scale Of The Balance Sheet Makeover May Surprise The Market (In A Good Way) [View article]
    Devon, it might very well be interesting but in order to better understand the company and its future prospects would it be possible for you to provide us with a multi-year summarized P&L and B/Sheets covering 2013, 2014 and 2015 and incorporate therein your asset disposal assumptions and ballpark capex numbers.

    BTW, I may be wrong but 6x cash flow for an asset sale looks high, unless that asset would be expected to produce very strong production growth. I've seen sales as low as 2.5 times cash flow for more stable low growth oil assets.
    Jun 20 11:17 AM | 1 Like Like |Link to Comment
  • Memorial Resource Development: An Interesting New Pure Play Cotton Valley Name [View article]
    Nice work. But, if I'm reading it correctly, TEV/Ebitda, at $4,310/$320 looks to be a bit of a choker at 13.5 times even allowing for a finger smudge on the back of the envelope.

    Interesting idea to play it via GDP.
    Jun 14 01:51 PM | 2 Likes Like |Link to Comment
  • The Next Billion (Barrels Of Oil): T. Boone Pickens Calls For Energy Plan At Stansberry Society Event [View article]
    Pickens was I the right place at the right time. Otherwise he's a lot of hot air and many, if not most, of his calls this past few years have been plain wrong.
    Jun 12 04:37 PM | 2 Likes Like |Link to Comment
  • Whiting Petroleum: Undervalued Compared To Rival Continental Resources - Has 35% Upside [View article]
    Michael, I believe you are correct in identifying WLL as having great upside potential. That potential is on the cusp of being realized. Notice that, despite a dreadful winter when almost every Bakken producer missed estimates, including the mighty CLR, that WLL beat estimates in Q1 and showed meaningful production growth over Q4. That was of prime importance considering the crippling weather.

    Considering the Q1-weather-related backlog of wells being brought into production during Q2, it is inevitable that WLL will show impressive production growth during Q2. Look for them to make EPS of about $1.20 in Q2 (possibly $1.25), easily beating the $1.13 estimate. That would put them on target for full year 2014 EPS of $5.00 and full year 2015 EPS of over $6.00. Based on today's share price of $74 that 2015 EPS figure would put them on a forward p/e of 12.3. Cheap, cheap, cheap, especially considering WLL's multiple years of drilling inventory.

    The shares are set for a strong run over the next 6 weeks by which time they should be comfortably into the $80-$90 range. Following Q2 earnings, you can be sure that analysts will raise their targets because of the strong Q2 production growth, because of impressive financial results and because of their multiple years of drilling visibility due to their leading drilling/completion technology.

    BTW, a small point, but with CLR having EV/EBITDA of 11.3 and WLL being 6.2, the discount (5.1) is 45%, not 80%. Still very appealing.

    Most shale oil stocks on my horizon are fully valued and don't look attractive to me. But yes, WLL is definitely a buy.
    Jun 11 03:09 AM | 3 Likes Like |Link to Comment
  • Halcón Resources: Impressive Downdip Test Results At El Halcón [View article]
    Very solid information Richard, thanks.

    I note that CWEI has 185k net acres mostly conjoined with and analogous to that of Hancon, especially in Burleson i.e. exposed to the deeper black oil and condensate. This compares to CRK's 30.4 net acres in the same area some of which is a touch more gassy.

    Of course both CRK and CWEI have other acreage. CRK has 72k/48k net acres in Lower/Upper Haynesville, 56k net acres in South Texas Eagle Ford and 52.2k net acres in the TMS. And CWEI has 80k net acres in the Permian Delaware basin.

    CRK has an EV of $2.25bn, similar to CWEI's $2.1bn.

    CRK stock is already trading above the mean analyst target for its share price whilst CWEI stock trades at a discount of ~38% to its mean analyst target.

    At first look, putting these factors together, I would have imagined that CWEI might have been a bigger beneficiary to this positive news flow from HK than CRK. What is your reason for preferring CRK over CWEI?

    Thanks.
    Jun 6 02:31 AM | 1 Like Like |Link to Comment
  • Is 3D Systems Ready To Rally? [View article]
    Is 3D ready to rally? Maybe in the very very short-term.

    However:

    If there's a market correction in the coming months as we exit the Fed induced rally by terminating QE infinity, then it is inevitable that richly valued stocks such as DDD, currently trading on a 2015 p/e of 45, will suffer another severe downdraft.

    I don't wish ill on any investors but I certainly fear for anyone now investing in DDD. Far better to buy high beta stocks like DDD after, and only after, there is a general market pull-back. A market pull-back is overdue, now is not the time to be a hero.
    May 27 06:34 AM | 2 Likes Like |Link to Comment
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