Amplify Energy: Producing In The United States, And Very Undervalued

(15min)

Summary

  • Amplify Energy is deeply undervalued after a failed merger, with current prices below the company's own recent buyback levels, presenting a compelling entry point.
  • Recent asset sales are expected to lower net debt, improving the balance sheet and potentially enhancing fair value in the near future.
  • Strong reserves, credible management, and independent audits support the company's PV-10 and production outlook, justifying my bullish discounted cash flow valuation.
  • Risks include commodity price volatility, regulatory changes, and interest rates, but even with these, AMPY looks like a gift at current prices.

The chemical engineer working the late night shift at the petroleum oil refinery in an industrial estate. Chemical engineering, fuel and power generation, petrochemical factory industry concept

onuma Inthapong

Amplify Energy Corp. (NYSE:AMPY) recently decided to terminate a merger agreement because of ongoing volatility in the market. As a result, the decline in the stock price went to deeply undervalued levels. AMPY also reported the sale of

This article was written by

Based in Europe, I am an independent investor with more than a decade of experience. I research cash flow statements and unlevered free cash flow figures. My articles may include a number of assumptions about the future free cash flow of companies. Many of those assumptions are based on previous financial figures reported, and my own forecasts about the future of the of the business model. My financial models could also include different financial figures including cost of capital, cost of debt, WACC, share count, net debt and other information. I will try to write about companies that reported financial figures for a long time. Hence, I usually do not write about growth stocks. With regards to trading multiples, I usually study EV/FCF, net income, and EV/EBITDA. I want to be part of this community because Seeking Alpha offers beneficial information to investors, readers, and analysts. I am here to learn from others, and from the market.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMPY either through stock ownership, options, or other derivatives. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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