Good results, lots of cash, growth ahead, stock now too cheap
The Q1 results were very good and that occurred despite most Bakken players missing estimates because the weather in January was more severe than normal.
Already the company had a strong balance sheet and plenty if cash.
Now there's an additional $200 million cash.
Join the dots; results improving strongly during 2013 in line with normal weather pattern, lots of cash to support a sold growth plan, stock already on a next year PE of less than 9. This stock us now too cheap.
The brokers will see NOG as a very good value play. Watch the price move up an easy 25% over the next few weeks just to catch up with peer valuations on the back of new broker coverage.
NOG was known for a long time as a company with a strong balance sheet and little if any borrowings. At March 21, 2013 long term borrowings were $440 million and Shareholders funds were $596 million. With the new borrowings the total long term borrowings figure goes to $640 million. That's bigger than shareholders funds.
NOG has joined the ranks of drillers that have heavily geared balance sheets:
- Borrowings $640 million
- Shareholders $596 million
market remains in the confines of a longer term Uptrend with tight money management stops.
Based on a pre-defined weighted trend formula for chart analysis, NOG scored +70 on a scale from -100 (strong downtrend) to +100 (strong uptrend):
+10 Last Hour Close Above 5 Hour Moving Average
+15 New 3 Day High on Friday
+20 Last Price Above 20 Day Moving Average
+25 New 3 Week High, May 13th
-30 New 3 Month Low on November 8