Rosetta Resources (ROSE): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab.
Rosetta's share price has been flopping around in the $40 to $60 range for over 3 years. It hasn't done much since I added it to the Sweet 16 on 4-6-2011, despite the fact that production was up 33.5% from 2012 to 2013 and the company guidance is for another 25% increase this year. PLUS, the percentage of liquids is increasing even faster.
I have tried to be super conservative in my forecast model just so I can come close to First Call's Price Target of $57.40. My Fair Value Estimate is now $67.45/share.
I am all about cash flow per share, so check this out:
Rosetta's CFPS by year:
2012A = $7.77
2013A = $8.94
2014E = $11.08
2015E = $13.70
It is not like the company is just depleting out their reserves either:
As of Dec 31, 2012,
Rosetta estimates proved reserves of 201 MMBoe (57.7% liquids)
As of Dec 31, 2013,
Rosetta estimates proved reserves of 278.5 MMBoe (59.5% liquids)
> 66.5 million bbls of crude oil and condensate
> 99.3 million bbls of natural gas liquids
> 676.6 bcf of natural gas
ROSE should easily beat the current First Call EPS forecast for Q1, so maybe it will draw some attention.
I will say that I have talked to their IR department a few times, trying to get them to host one of our luncheons. I have not been impressed by their IR folks. This may be a case of a company with rock solid fundamentals that just doesn't do a good job of telling their story.
Regardless, the Sweet 16 is all about production and reserve growth and ROSE has both in spades. It stays in the Sweet-16 and it has the potential to be a big winner for us in the 2nd half.