KOG

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celtic

KOG

Post by celtic »

I notice that the fair mkt value for KOG is listed as $3.49. Currlent price is $4.30. Not complaining :D . Just wondering if you feel that it is ahead of itself and a pull back is looming. Or is this the "little engin that could.' and hold on for the ride. Thanks
dan_s
Posts: 34470
Joined: Fri Apr 23, 2010 8:22 am

Re: KOG

Post by dan_s »

You bring up a good point: What is my "Fair Value" price on each Net Income and Cash Flow Forecast?

It is what I believe the company would sell for if it was but on the market today.

Keep in mind that you are looking at the KOG forecast based on the 4th quarter report. My "Fair Value" is likely to go up if they deliver solid 1st quarter results. For example, Brigham Exploration (BEXP) Fair Value almost doubled when I updated my forecast over the weekend as a result of very good first quarter results. BEXP has an extremely valuable acreage position in the Bakken Shale. I'm sure it is on the radar screen of a lot of large-caps that wish to enter that oil play.

Also, KOG is almost a pure play on the red hot Bakken Shale. With oil prices going higher (and I definitely think they will resume their upward trend) the Bakken Shale economics are very strong.

My Fair Value calculation is not really a price target for the share price. It is more a break-up value. As you know the Market can take stocks to very high multiples. Because I consider KOG a micro-cap I have it at a much lower multiple than BEXP. The Company has a very strong Balance Sheet (which I love) but they are going to outspend their operating cash flows this year which is a bit of concern.

I do like Kodiak and I will discuss it more after I see their 1st quarter results.

Dan
Dan Steffens
Energy Prospectus Group
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