Sweet 16 Update - August 25
Posted: Thu Aug 25, 2022 9:06 pm
Susan and I are driving up to Dallas on Friday, August 26 for our oldest son's 41st birthday. He was born in Wichita Falls, Texas in 1981 where we spent a year. After leaving public accounting, I took a job with a tiny private upstream company helping them set up their accounting system. I worked long hours and Susan hated the town, so we moved back to Tulsa a few months after Clark was born. I took a job as CFO for Oklahoma Petroleum Management, which was a wild 2 year "gig" before Hess Corp. hired me in November 1983.
I sent an updated Sweet 16 summary spreadsheet to Sabrina that will be posted to the EPG website Friday morning. All of the current valuations are updated. As I posted earlier, there were no significant valuation changes since the decline in the oil price was offset by higher natural gas prices. Comstock Resources (CRK) got a nice valuation gain (to $40/share) since it is almost a pure "gasser".
For the four trading days that ended August 25, the Sweet 16 gained 8.14% and the portfolio is now up 68.74% YTD. During the same time, the S&P 500 Index lost 0.66% and is now down 11.94%. FEAR of the Fed's next move is keeping most stocks trapped in a Bear Market, while the Energy Sector continues to be the only place generating significant gains.
Comstock Resource (CRK) now leads the Sweet 16, up 148.08% YTD. Followed by:
Antero Resources (AR) up 142.34%
EQT Corp. (EQT) up 126.87%
SilverBow Resources (SBOW) up 109.13%
Range Resource (RRC) up 93.21%
Callon Petroleum (CPE) gained $3.37 to $44.42, but it is still down 5.99% YTD. It is the only Sweet 16 stock down YTD.
My adjusted valuation is $100.00 per share and First Call's price target is $70.55.
Callon's guidance is that they will ramp up production during 2H 2022 and their PV10 Net Asset Value on 12-31-2022 should come close to my current valuation.
SilverBow (SBOW) has the most upside to my valuation of $105.00 per share.
Ovintiv Inc. (OVV) is almost a "gasser". It's Q2 production was 500,192 Boepd (65% natural gas and NGLs). The Company's production should ramp up to 520,000 Boepd by year-end and they have a lot of high-quality running room. The Company's balance sheet is now in good shape and they pay a nice dividend.
SBOW and Earthstone Energy (ESTE) are my Top Picks. These small-caps will be closing very accretive acquisitions in a few months that should draw a lot more "love" from the Wall Street Gang in Q4.
When I get back from Dallas on Sunday, I will start working on the newsletter after I get all of the Small-Cap Growth and High Yield Income portfolio stock valuations updated.
There is still a lot of upside for the Sweet 16. Based on my 2023 conservative forecasts, the Sweet 16 is trading a combined PE ratio of 4.2, which is insane for a group of companies that are all free cash flow positive with lots of running room.
I sent an updated Sweet 16 summary spreadsheet to Sabrina that will be posted to the EPG website Friday morning. All of the current valuations are updated. As I posted earlier, there were no significant valuation changes since the decline in the oil price was offset by higher natural gas prices. Comstock Resources (CRK) got a nice valuation gain (to $40/share) since it is almost a pure "gasser".
For the four trading days that ended August 25, the Sweet 16 gained 8.14% and the portfolio is now up 68.74% YTD. During the same time, the S&P 500 Index lost 0.66% and is now down 11.94%. FEAR of the Fed's next move is keeping most stocks trapped in a Bear Market, while the Energy Sector continues to be the only place generating significant gains.
Comstock Resource (CRK) now leads the Sweet 16, up 148.08% YTD. Followed by:
Antero Resources (AR) up 142.34%
EQT Corp. (EQT) up 126.87%
SilverBow Resources (SBOW) up 109.13%
Range Resource (RRC) up 93.21%
Callon Petroleum (CPE) gained $3.37 to $44.42, but it is still down 5.99% YTD. It is the only Sweet 16 stock down YTD.
My adjusted valuation is $100.00 per share and First Call's price target is $70.55.
Callon's guidance is that they will ramp up production during 2H 2022 and their PV10 Net Asset Value on 12-31-2022 should come close to my current valuation.
SilverBow (SBOW) has the most upside to my valuation of $105.00 per share.
Ovintiv Inc. (OVV) is almost a "gasser". It's Q2 production was 500,192 Boepd (65% natural gas and NGLs). The Company's production should ramp up to 520,000 Boepd by year-end and they have a lot of high-quality running room. The Company's balance sheet is now in good shape and they pay a nice dividend.
SBOW and Earthstone Energy (ESTE) are my Top Picks. These small-caps will be closing very accretive acquisitions in a few months that should draw a lot more "love" from the Wall Street Gang in Q4.
When I get back from Dallas on Sunday, I will start working on the newsletter after I get all of the Small-Cap Growth and High Yield Income portfolio stock valuations updated.
There is still a lot of upside for the Sweet 16. Based on my 2023 conservative forecasts, the Sweet 16 is trading a combined PE ratio of 4.2, which is insane for a group of companies that are all free cash flow positive with lots of running room.