SM

[jb2257]

Do you know what's going on with SM? It's down $16. They reported last night and the earnings looked good. What am I missing?

[dan_s]

I have been looking at it all morning and I see zero reason for the sell-off.

They took a big impairment charge in Q4 but that is a non-cash charge. The production mix was slightly more natural gas than I was expecting but no big deal.

Increasing NGL prices really help SM since only 4% of 2014 NGLs are hedged.

I will post my updated forecast model to the website shortly.

Cash flow per share was $19.74 in 2013 and should be near $23.00 in 2014. IMO there is no way a company of this quality should be trading at less than 4X CFPS.

SM has less than 68 million shares outstanding and much smaller float. When a big block sells it is going to hammer the share price. That's what has happened.

[Laurin_DE]

the way the results were reported via Yahoo made it sound like a bad earnings miss... while the actual results are pretty good. Looks like a buying opportunity to me...

[jb2257]

I appreciate your response. It's amazing how fast they can take these down, but I don't think this would be a good day to sell.