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КОрпорация Кодиак Ойл & Газ Message Board

  • beowulfsalot beowulfsalot Sep 23, 2013 5:03 PM Flag

    Valuation

    Currently KOG is trading around 17 times this years expected earnings. If next year, KOG trades 17 times 2014's expected earnings, then PPS should be around 16.5-17. But, it wouldn't surprise me to see KOG trading 20-25 P/E with revenue expected to grow by more than 46 percent in 2014. With all of that having been said I am putting a $22 price tag on my shares next year.

    Sentiment: Strong Buy

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    • Couple of keys to watch. Closer spacing in blocks and increasing efficiency. Becoming cash flow nuetral and maybe cash flow positive, allowing for a similar CAPX and pay down of the revolver. Earnings may surprise on the up side for a change due to better wells. They have learned a lot about how to drill and complete wells. In fact there may be more up side to this.

    • Excellent post! 2014 will be the year the baby bear roars$$$$$$$

      Sentiment: Strong Buy

    • Beowulf: I sure hope you are right, but looking at Jan 2015 options, just getting to $17 would be sweet. Looks like a bull call sprea, where you buy the 12s and sell the 17, can be purchased for about $1.25 a share. Break even is $13.25 and if the PPS goes north of $17, you make the full $5 spread and quadruple your money. The icing on top is the gains would be LTCG for better tax treatment. (Easier to quadruple your money getting to $17, than it is to wait for the stock to go to $44 if you know what I mean)

      I have several spreads working right now on the Jan 14 options that hit LTCG in mid November,when I might take most of the gains on one and roll it forward for the January 2015 play noted above as I think the probability of $17 by 2015 is very high given the upcoming changes in the reserve report that follow from the DSU projects. GL to the longs. Lex

    • beowolf, I like your projections and your valuation! I'm with you 100%

      RAT in Houston, TX

 
KOG
6.56-0.39(-5.61%)Dec 5 4:02 PMEST