sm

[mkarpoff]

Disappointing production from sm? Price drop. Ugh.

[dan_s]

Everything was down today on fear of UK leaving European Union. IMO "Fears" like this end up having no impact on oil demand.

As I posted before, SM produces a lot of natural gas. Gas prices should continue to drift higher.

[dan_s]

I updated the SM forecast model and posted it to the website. A company with cash flows like this deserves to be trading at 6X operating cash flow per share. It has plenty of cash flow, liquidity and lots of running room. The fact that it trades at such a low multiple compared to the peer group is a mystery to me.

Operating cash flow per share:
2014A = $21.10
2015A = $13.48
2016E = $9.32 < based on my forecast
2017E = $13.20 < based on my forecast

[bigtex]

very nice pop on SM today

[dan_s]

Fundamentals do win eventually and SM has a lot more upside, unless my forecast model is WAY OFF.