Sweet 16 Update - July 28

[dan_s]

The Sweet 16 was down 1.4% for the week ending July 27, all because of the moves on Friday. All three "gassers" (AR, GPOR and RRC) were down big on Friday despite natural gas prices being up. All 3 gassers are trading below book value, which is insane since all 3 are profitable and no upstream company should trade below book value because GAAP accounting rules require mark-to-market adjustments quarterly. Earthstone Energy (ESTE) is also trading below book value and it is very profitable.

Lots of FEAR in this market, most of which is based on "fake news".

The Sweet 16 closed on Friday 56.3% below my valuations and 31.5% below First Call's price targets. You can download the Sweet 16 spreadsheet each weekend that shows my up-to-date valuations and First Call's price targets for each company. You should all get in the habit of doing this.

Cimarex Energy (XEC), which is one of the most profitable companies in the Sweet 16, is down 18.9% YTD.
2017A EPS = $5.28 with CFPS of $12.67
2018E EPS = $7.80 with CFPS of $16.26
2019E EPS = $9.63 with CFPS of $19.08
Plus, XEC has a solid balance sheet and lots of running room in STACK and the Permian Basin.

Range Resources (RRC) will be the first Sweet 16 company to announce Q2 results on July 30.

Also announcing Q2 results next week are:
Antero Resources (AR) on Aug 1
Concho Resources (CXO) on Aug 1
EOG Resources (EOG) on Aug 2
Diamondback Energy (FANG) on Aug 3
Matador Resources (MTDR) on Aug 1
Newfield Exploration (NFX) on Aug 1

I'm going to be very busy next week.

I will be away from my desk July 30 to Aug 1, because our Cruise Director planned a little trip with some friends. I will be check in each day and I will be back at my desk on Wednesday afternoon.

[dan_s]

Good analysis of Newfield Exploration (NFX) in this article: https://seekingalpha.com/article/419172 ... -q1-update