Devon Energy (DVN)

[dan_s]

Devon Energy Corp. (DVN): An updated profile and forecast model have been posted under the Sweet 16 Tab.

My valuation of $107.35 is way above First Call's Price Target of $88.54. I believe many of the Wall Street analysts have missed the significance of the transformation Devon has accomplished from a "gasser" to a company with HUGE upside in the Eagle Ford, Permian Basin and several other liquids plays. Devon also has a very profitable heavy oil business in Canada.

Devon recently concluded a $5 Billion Non-Core Asset Sales program. Before year-end they will close on a $2.3 Billion sale that was announced June 30. These sales do result in a slight (4.5%) YOY decline in production, but top line revenues will be up more than 20% YOY because of the shift to a lot more crude oil production. By year-end Devon will have a rock solid balance sheet and they will be poised for more than 20% oil production growth in 2015. Heading into 2015 my valuation should be a lot higher.

DVN is a "Core Holding" quality company that I believe has a lot of upside for us over the next six months.