LPI earnings report
Posted: Thu Aug 06, 2015 8:44 am
sent the stock down 18+% at open. report looked good to me---what did I miss?
LPI looks great to me. I have updated my forecast model and it will be posted to the website later today.
If you ignore the non-cash impairment charge and the non-cash mark-to-market adjustment on their hedges (which you all should), LPI had a GREAT quarter. AND they are going to have solid Q3 and Q4 results. LPI has 100% of this year's oil production hedged at $80.99/bbl.
Their hedges for 2016 are also very good. See note at the bottom of the forecast model.
My valuation increases by $1.25/share to $16.25. Compare to First Call's price target of $13.31.
AS I HAVE SAID IN THE NEWSLETTER AND REPEATEDLY HERE, THIS MARKET IS SO NEGATIVE ON THE UPSTREAM COMPANIES THAT INVESTORS NO LONGER BOTHER TO LOOK AT THE FUNDAMENTALS, HEDGES OR PRODUCTION MIX. When this happens, the small-caps get hammered BUT they are like coiled springs that can jump back quickly when commodity prices move back up.