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Broadridge Financial Solutions, Inc. Message Board

  • long_or_short_of_it long_or_short_of_it Jul 7, 2000 2:11 PM Flag

    Nat gas futures has recovered nicely


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    • This is in addition to current production. They
      should add 10 mmcf by the end 3rd quarter (I believe)
      and for a small company this is significant.

      I agree late last year was the time to buy MHR. It
      was at 2 3/8. However, I do still think it is a
      double atleast from here. Earnings (real earnings) will
      be obvious this quarter and each of the next

      The volume of stock that has traded recently is
      clearly from institutions and that in essence lowers the
      float. Making moves up larger.

      MHR has in place
      the plan to lower its significant debt, which is the
      companies only drawback. I would expect somewhere around 60
      million dollars of debt to be replaced with equity this
      year--warrants. This will help the balance sheet and will allow
      the float to increase, which will help attract
      institutions that otherwise would not buy because of the small
      float. (Obviously, some institutions do not have a
      problem with the small float). Of note, insiders own a
      ton of stock, and are not selling.

      I agree
      that the large caps are a little safer, but due to
      their size and valuations already, their moves will not
      be as large as the small caps. Typically
      institutions buy the large caps early in the cycle and the
      small caps once the large caps get too

      With 2+ dollars of free cash flow, even a multiple of
      5 gets us to a $10 stock. I find the market usually
      goes too high on the way up and too low on the way
      down. I am holding for the high teens. Possibly 1 year
      from now if gas stay above $3.50. Sooner if we have a

    • MHR is steadily increasing their production and
      will have a cash flow of over $2.00 per share this
      year. I, too played the small caps early this year and
      the only two I have now are MHR and DNR. Still in BR
      and SFS but have switched mainly to large cap
      canadian stocks--TLM,CXY, hard at MHR. It
      looks like a natural gas winner to me.

    • I agree this news isnt a very big deal for BR,
      nor is any individual well hit (given the relative
      size of BR.)

      But I'm curious how 2.5MMCF per
      day is very significant for MHR? These wells
      announced today are going to be worth less than $900K per
      quarter for MHR. Will this be in addition to previous
      production levels, or partially additive (due to natural
      depletion on other production), etc.

      IMO, the time
      to play the small cap e&p's was late last year and
      early this year before they made their runs. I caught
      that wave, but am now primarily in the large caps (BR,
      SFS, EOG). I'm willing to be convinced otherwise of

    • I am a long term holder/promoter of MHR. I also
      own BR. This is very significant for MHR. Not really
      a big deal for BR. MHR hit a new high today and is
      getting close to an all time high. Earnings for MHR will
      be great, estimates for the year will be increased.
      I could see them earning $.50 or better this year,
      and $1.20 or better next year. Not bad for a 6.50
      dollar stock.

    • The "string of dry holes" you are worried about is in deepwater. The recently announced successes in the Gulf are on the shelf in the more traditional plays.

    • Staff reported on coverage reiterated by Analysts in todays news.
      BR reiterated with a Strong Buy

    • but I don't think success in the Gulf translates into the Street forgetting the string of failures.

      It will take a world class find to break the skid, IMHO. These aren't.

    • It certainly is a newsworthy event as far as MHR is concerned. I am an investor in both BR and MHR and believe both have exceptional appreciation potential with virtually no downside risk.

    • Any of the board experts care to elaborate on this Magnum PI Hunter press release - is this a newsworthy event? Does this break BR's string of dry holes?

      Best of luck!

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