It is a typical over reaction. They only offered $9.5 m public. That's not a lot of dilution.
The offering price is $0.45. That's what big guys are willing to pay for this.
What's the risk to have it at $0.47? I feel it will reach to $0.75 in a short term, and then maybe settle around $0.6 for a while.
If another good news(more contracts) hit the wire, it will be over $1.00 in the pop.
up or down, 20% is normal for SGY. I bought 100K shares at $0.33. Sold half at $0.62. I am still holding 50K shares. I will buy back 50K shares if it drops to 0.30ish.
It is complex, with many possibilities.
The best case scenario, oil price keeps going up, SGY survives and makes money, then SGY becomes a $10 stock in a year or two.
The worst case scenario, oil goes back to $40 or lower, SGY runs out of cash. The day SGY declares BK, it will hit $0.30 when the market opens. I will sell, and take some losses.
The more likely scenario, oil prices stays around $50 for a while, SGY has some cash to hang in there for a while, then SGY will be traded between $0.4 to $1.00 for a while. You will see some zigzags.
BK is not the best interest for anybody, including banks. There must be some close-door talks before SGY declares BK. If banks see some value left in SGY, especially if they see the hope of oil price recovery, they will negotiate. Nobody wants SGY to BK unless there are absolutely no other options.
All I can say is SGY is in a better shape among all small oil companies. If oil goes back to $40 or lower for another year, all small oil companies will die. However, if few can make it, SGY will be one f them.
Right now, oil price is in up trend, and looks super strong. Whenever there was a temporary dip in oil price, someone just bought it back up. Sure there will be some pull backs of oil prices, bit as long as the up trend of oil price is not broken, I will continue hold SGY.
SGY price seems reasonably strong in the past few days. SGY took a hit initially after the reverse split was announced, but there was not any panic. I still saw continuous buying of SGY.
Two years ago, who would have thought oil price would go down this fast? Now, who would think that oil price could go back to $70 by the end of summer? All are possible. Market cannot be predicted.
SGY is still a buy at this price level.
$5 is long term goal. Certainly we won't see it in few months, unless Oil hits $70/barrel in the summer. If TPLM survives, oil price goes up. $70 for oil in 2017 is not entirely impossible, then we will see TPLM at $5 in 2017.
UPLMQ, BBEPP are all BK and are all trading above $0.60.
Why can't buy SGY at $0.55? What is this risk?
Now it is the best time to get in oil stocks.
Oil shows signs of recovery since Feb of this year. The trend is proven. However, not all oil companies have enjoyed the ride, especially small oil companies. Some filed BK, and some others, with better balance sheet, are surviving but trading at BK level.
The better ones are SGY and TPLM, both have $300M, 400M revenue, but market cap are around just $10M. Both have relatively healthy balance sheet with no imminent risk of BK.
SGY now is $0.53, TPLM now is $0.15. I am buying both as options with no time decay. My bet is by the end of this summer, oil will be $60, and then both companies will trade above $2.
TPLM is significantly undervalued when it is compared to peers. All data is from Yahoo finance.
I list Market cap, Revenue, total cash, Debt, all in $million
TPLM: 12, 358, 115, 903
BCEI: 127, 263, 218, 1090
WRES: 11, 88, 26, 476
HK: 38, 495, 8, 2880
BBEPP: 33, 610, 81, 2960
WRES, HK, BBEP will go BK because they have too much debt with too little cash.
TPLM and BCEI should survive. They have large amount of cash with reasonable debt.
TPLM should be compared to BCEI. Both companies have similar debt ratio. TPLM revenue is 150% of BCEI, but BCEI has 10 times of market cap of TPLM. BCEI is trading at $2.44 as of today, and TPLM is only $0.15
BBEP and UPL filed BK already, they are BBEPP and UPLMQ now, and are traded at $0.63 and $0.85.
So TPLM is already traded below BK price, but with large cash in hand, there is no imminent risk of BK. So what is the risk to buy some TPLM?
Don’t mean to predict the trend for oil price, but even as oil price of today, comparing to its peers, TPLM fair market value should be $1.5 today.
For $0.15, and with no imminent risk of BK, TPLM looks like a screaming buy to me. EVEN if TPLM will file BK one day(highly doubt it though), you will not lose a lot of money, you still have chance to bail out. Check out BPEPP and UPLMQ. They filed BK, and are trading above $0.60. However, if TPLM takes off, we will see it over $1.00 easily. If oil price goes up, it will go back over $5.00.
Yesterday’s sudden drop was apparently related to the reverse split. Someone knew this earlier than most of us. However, this is just a knee reaction.
Reverse split does not change the company a bit, not the revenue, not the profit margin, not the cash, not the debt. In my book, SGY remains the exactly the same company. Only difference is SGY now has much less shares floating. Any good news will send this stock much higher because much less shares available.
I still remain positive on SGY. There bond due in 2017, and they still have $300+ M cash in hand. Debt is not too bad. Revenue is $467M, but market cap is merely 30M. If you believe oil price will go back to $60, SGY is a $300M company