lone
Re: lone
I was wondering if you guys just looked at Lonestar when it went down.
Lonestar has very few shares trading. Therefore, it only takes a few buyers to cause a sharp move in the share price. Go to the EPG website and download my forecast model for the company (under the Small-Cap tab). Look carefully at row 47 and you will see energy sector analysts should like the company. LONE is still trading for less than 2X operating cash flow per share. My "Takeover Valuation" is $26/share.
Lonestar has very few shares trading. Therefore, it only takes a few buyers to cause a sharp move in the share price. Go to the EPG website and download my forecast model for the company (under the Small-Cap tab). Look carefully at row 47 and you will see energy sector analysts should like the company. LONE is still trading for less than 2X operating cash flow per share. My "Takeover Valuation" is $26/share.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: lone
I had a call today from one of our members today asking about Lonestar. Below is an e-mail I sent to him in response.
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Let's use Lonestar's forecast model (which EPG members can download from the EPG website) for a short lesson on how to profit from using my forecast models housed on the EPG website.
I have been following Lonestar over two years and I've had multiple discussions with Frank Bracken, the CEO. Frank is a sharp financial guy and a "straight shooter". Everything he's said the company is going to do they have done so far.
1. Open the spreadsheet to Excel. Take a few minutes to understand the general layout.
Revenue - expenses = Net Income and Net Income + non-cash charges = cash flow < This is not Rocket Science
2. Look across row 53 and you see that Lonestar's production has increased and is expected to increase quite a bit in 2017.
Despite a very conservative capital program in 2016, production is still going to increase this year.
Their capital program is fully funded by cash flows from operations. < This is very good
3. Look across row 46 and you see that Lonestar generates positive cash flow from operations and has done so during the entire downturn in oil prices, primarily because Frank did a great job hedging their production at good prices. (at the bottom of the spreadsheet you can see their hedges in place today.)
4. Look at row 43 and you see that the common stock outstanding has declined. This is because they did a 1 for 2 reverse split when they moved to NASDAQ in July.
5. Look at row 47, "Operating Cash Flow Per Share" and you see that LONE is trading for just 2X CFPS. That is ridiculously low for a company with a decent balance sheet, lots of running room in the Eagle Ford and increasing production. The Sweet 16 is currently trading for approximately 13.5 X CFPS today. Some of the Permian Basin companies are trading for over 20 X CFPS. IMO LONE should be trading for at least 6X CFPS, even though my current valuation is just lower.
Lonestar has a very small float, therefore only a few buyers or sellers can cause a big move in the share price. There has been an active buyer the last two day.
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Let's use Lonestar's forecast model (which EPG members can download from the EPG website) for a short lesson on how to profit from using my forecast models housed on the EPG website.
I have been following Lonestar over two years and I've had multiple discussions with Frank Bracken, the CEO. Frank is a sharp financial guy and a "straight shooter". Everything he's said the company is going to do they have done so far.
1. Open the spreadsheet to Excel. Take a few minutes to understand the general layout.
Revenue - expenses = Net Income and Net Income + non-cash charges = cash flow < This is not Rocket Science
2. Look across row 53 and you see that Lonestar's production has increased and is expected to increase quite a bit in 2017.
Despite a very conservative capital program in 2016, production is still going to increase this year.
Their capital program is fully funded by cash flows from operations. < This is very good
3. Look across row 46 and you see that Lonestar generates positive cash flow from operations and has done so during the entire downturn in oil prices, primarily because Frank did a great job hedging their production at good prices. (at the bottom of the spreadsheet you can see their hedges in place today.)
4. Look at row 43 and you see that the common stock outstanding has declined. This is because they did a 1 for 2 reverse split when they moved to NASDAQ in July.
5. Look at row 47, "Operating Cash Flow Per Share" and you see that LONE is trading for just 2X CFPS. That is ridiculously low for a company with a decent balance sheet, lots of running room in the Eagle Ford and increasing production. The Sweet 16 is currently trading for approximately 13.5 X CFPS today. Some of the Permian Basin companies are trading for over 20 X CFPS. IMO LONE should be trading for at least 6X CFPS, even though my current valuation is just lower.
Lonestar has a very small float, therefore only a few buyers or sellers can cause a big move in the share price. There has been an active buyer the last two day.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group