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Magnum Hunter Resources Corp. Message Board

  • thedpg06 thedpg06 Aug 16, 2004 10:43 PM Flag

    My new estimates part2

    Yes my estimates are optimistic, but consider these 2 facts. Number one, my range for last quarter for revenue was $110M-$120M and I thought for sure we�d do $115M. Early on in the quarter I called for EPS to range from 32-34 cents. Eventually I called for 35-40 with 38 cents my final estimate. The posts are there, however many pages back. Secondly, at the start of last q, analysts forecasted 20 cents in eps to begin with. Throughout the quarter, they kept raising them so they wouldn�t look like maladroit fools. These analysts are forecasting LOWER commodity prices with these estimates. So basically if commodity prices stay where they are, MHR will beat estimates anyway. Last q, commodity prices went up, therefore they crushed estimates.

    Whats in store for 2005? Well some big time estimate revisions. Some clown at SW Securities has 74 cents for next year. BM has $1.13. The top analyst has $1.25, which comes out to $113 Million. That�s using 90 million shares. BM has $102 Million with the highest revenue estimate of $537Million.

    The company is better hedged in 2005, and I expect that we will see commodity prices trend upwards, although they will stay volatile. My revenue estimates are from $575M - $620. With production averaging 245KMmcfe for 2005, if oil and gas stay where they are currently, Mmcfe price will be about 5.95, due to better hedging and only 8% hedging for oil. This would yield about $600Million in revenue. I would look for $150-$160M in income. That would be $1.67-$1.78 in EPS.

    It�s hard to project that far out. Estimates for this year were as low as 90 cents at the start of the year- and that�s with the old share count. All I would say is that investors should expect EPS to be north of $1.50 for next year.

    I�ll discuss MHR stock price and stock action in other posts.

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    • Respectfully, my guess is that the revenue/ production numbers and EPS numbers will come in, at best, at the very low end of your numbers for the balance of 2004...having followed these guys for quite a while, I would suggest that they often miss their production numbers due to "weather", "unscheduled pipeline shut ins" or some other snafu..Evans has talked too big a game and his credibility in the industry could be better...as such, I now have learned to take their production forecasts and discount them by about 3%...Mind you, I still view the company as undervalued, but that is neither here nor there...Moreover, I think when they complete the spinoff of their midstream assets (sometime in late Sept) that will further assist in paying down debt, assist in cleaning up the balance sheet and will get a few investment bankers er' a analysts talking up the stock....the stock is cheap..very cheap and any surprise to the upside will result in multiple expansion..hopefully to the point where they trade in line with their peer group which would put the stock price materially higher than it is today...The bottom line is that we need to LOWER expectations so we get an UPSIDE surprise...read some of the EPS Press releases from last year...you will see what I mean....ALL IMHO...DEV.

      • 2 Replies to devpuck2000
      • You sound like you have watched this stock some time?
        I would be interested if you have a opinion on the warrants? I know they are suppose to expire 3/21/05.
        Regards
        JQ

      • I agree about the production. Thats why I used 245Kmmcfe instead of 252 like BM has. I've only followed for 2 quarters though.

        What do you mean by the press releases?

        Estimates for last quarter were initally for 20 cents. Its stupid how these analysts move their numbers up a week away from the announcement. Then it seems as though MHR didnt beat estimates when they really clobbered them. Hopefully this quarter, as these estimates move up, the stock will. Expectations from these analysts are low enough already- we should have no trouble beating them.

 
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