To say the market’s been volatile is an understatement. In these uncertain times it’s important to invest in what you know. A good story with good financials will eventually lead to a rising stock price.
And here’s a company that’s ready for your radar.
Industry Oil & Gas Drilling & Exploration
Recent Price $3.06
Market Cap $28.8 m
Shares Outstanding 9.43 m
Average Volume 28,611
Dividend Yield N/A
PostRock Energy Corporation (PSTR) is a regional energy acquisition, exploration, development, production and transportation company.
They are the largest operator in the Cherokee Basin, which spans Kansas and Oklahoma.
PSTR owns and operates over 2,800 wells and approximately 2,200 miles of gas gathering lines in the Cherokee Basin. They also own approximately 1,100 miles of interstate pipeline in Kansas, Oklahoma, and Missouri.
In the second quarter of 2011, PSTR grew revenue by about $1.7 million. At the same time they’ve cut back on their costs. Total savings are approaching nearly $4.1 million year over year.
Last year the company suffered a loss of $9.6 million.
This year the company generated a net income of $7.5 million… that works out to an EPS of $0.68 a share! The future is looking bright.
PSTR has also been paying down its long term debt. It’s down 12% compared to where it was a year prior.
KEY METRICS ANALYSIS
Trailing P/E 0.79 x
Price / Sales 0.3 x
Return on Assets 7.4%
Insider ownership 18.3%
Short Ratio 3.2 x
Current Ratio 1.22 x
Total Debt To Equity N/A
PSTR recently finished liquidating some of their Appalachian Assets. In all they sold $44.6 million in holdings. The proceeds from that paid off an outstanding debt of one of their subsidiaries.
The Cherokee Basin is this company’s bread and butter. Management has recently been pursuing a strategy of consolidation in that area. They recently acquired 14.9% purchase of another Basin operator, Constellation Energy Partners.
There’s also been a lot of Basin production news from the company in the first half of 2011. PSTR brought 55 new wells online so far this year. The company is also using modern technology to reactivate ‘legacy wells.’ Altogether they reactivated 49 wells.
Terry W. Carter – CEO
Jack T. Collins – CFO
Tom A. Saunders – Executive VP
Richard Marlin – VP Engineering and Operations, Mid-Continent
Chart Courtesy of StockCharts.com
PSTR’s stock has suffered along with the rest of the market. As a result, new money flowing into the stock is able to grab shares at great valuations!
PSTR’s 52-week low was $3.02 and the 52-week high was $8.45. Right now the stock is trading at the 52-week low. The 50-day moving average is near $4.23 a share and the 200-day moving average is at $5.71. The company has a market cap of $27.8 million and 9.4 million shares outstanding.