SM Energy getting some "Love"

[dan_s]

Nice to see SM getting some love today: http://finance.yahoo.com/news/why-sm-en ... 10254.html

IMO this is one of the most undervalued stocks we follow. It is trading at less than 4X operating cash flow per share, which is ridiculous for a company of this quality.

First Call's Price Target is $91.95 and I am expecting that to go up after they report solid Q2 results. My Fair Value Estimate is $150/share.

[dan_s]

Take a look at the 1-year chart for SM. I now think SM could be returning to the low $90s soon.

The sell-off in mid-February was a gross over-reaction by Market to some comments made on their year-end conference call about poor Eagle Ford test results in SM's "Area 1" in the far NW corner of their acreage block. Most of us in Houston knew that acreage was Tier Three quality, at best. SM was just testing to see what was out there. They have over five years of low-risk high-quality drilling inventory in the Eagle Ford.

See my recent profile on SM under the Sweet 16 Tab.

[jb2257]

Patience is starting to pay off on SM. Thanks for the good advice to hold on.

[dan_s]

That is why you guys pay me the Big Bucks!