| Deep, Deep Value in the Oil Patch The book value is 9.75X the current price Good day everyone, We are initiating coverage on Mammoth Energy Services, Inc. (NASDAQ: TUSK), a company that operates as an oilfield services company. Statistics: Current price $1.72 per share Book value (mrq) $16.96 per share Revenue (ttm) $1.11 billion Market Cap $77.4 million (p/s ratio is a very low .07X) Float (est) 12.98 million shares TUSK shares have a 52-week range of $1.60 to $28.27 and are currently trading at 93.92% off the 52-week high. Institutions own 80% of the outstanding shares. Wednesday October 23rd, 2019, we alerted everyone to another undervalued stock from the oil patch, Gulfport Energy Corporation (NASDAQ: GPOR). Our coverage has so far yielded a potential gains of well over 20% for our members in just a few days and the close on Friday indicated an uptick of 8.8%. We believe TUSK shares could equal or outpace the recent performance of GPOR shares. TUSK operates in three segments: The Infrastructure Services segment offers a range of services on electric transmission and distribution networks, and substation facilities. The Pressure Pumping Services segment provides high-pressure hydraulic fracturing services to enhance the production of oil and natural gas. The Natural Sand Proppant Services segment is involved in mining, processing, and selling proppant for hydraulic fracturing; buying processed sand from suppliers on the spot market and reselling that sand. The levels of capital expenditures by TUSK customers are predominantly driven by oil and natural gas prices. Prices for oil patch products are soft, but they have been lower. Investors will often turn away from participants in the sector during periods of weak oil and gas pricing, lowering the price of the stocks. In the case of TUSK, the stock price has fallen much further, than the oil patch commodity pricing should indicate. Gas and oil prices have suffered a 30% decline this year but TUSK shares are 93% off their 52-week high. TUSK is expected to release Q3 earnings on or about November 6th. Here is what the analysts expect: Revenue $160 million Earnings ($.17) per share Here’s some info that the company has made available: They suspended their quarterly cash dividend beginning with the second quarter of 2019 in response to oilfield market conditions. They reduced their 2019 capital expenditure budget 49% from $80 million to $41 million. As of June 30, 2019, their infrastructure services backlog was approximately $595 million. The stock may move higher if the actual Q3 numbers meet or exceed the analyst’s expectations. We see many similarities between the TUSK shares at their current price, and the Gulfport (GPOR) shares we alerted two weeks ago. Both companies are similar in scope with revenues at $1 billion +/- and both have seen their share price drop to a level beyond what the sector conditions warrant. The shares of both companies are largely held by institutions. Last Friday TUSK shares had a nice 7.5% gain as investors seem to realize these shares are oversold. We believe that is a trend that may continue in the near term. Eight Wall Street analysts have issued price targets for Mammoth Energy Services (TUSK) in the last 12 months. Their average twelve-month price target is $6.58, suggesting that the stock has a possible upside of 278.35%. As you do your due diligence, you will likely see many advertisements from law firms seeking participants in a class action lawsuit due to the decline in the value of the company shares. This is a fairly common tactic. It’s important to recognize that these are advertisements and no actual lawsuit that we know of, has been filed. Warren Buffet has been known to say, “when everyone is selling buy, and when everyone is buying sell.” We could certainly apply Buffet’s logic to TUSK shares. The chart below indicates that TUSK is trading below its 50 DMA and 200DMA of $2.65 and $$10.91 respectively. The current RSI (14) is 33.33. These data may indicate shares that have been oversold. The Traders News Group GPOR original reports below _______________________________________________________ Oversold GPOR Shares Could Yield More Gains, Up 6.59% So Far Shares poised to break through their 50 DMA (Update on day 3 of our coverage the 50 DMA was broken and well over 20% in bookable gains so far) Good day everyone, We are continuing coverage on Gulfport Energy Corporation (NASDAQ: GPOR), a company engaged in the production of natural gas, crude oil, and natural gas liquids. GPOR shares showed a little traction yesterday, showing 8% gains at midday and that’s good news. Should the shares cross their 50 DMA of $2.80 we could see a nice continuation. Natural gas represented 93% of the GPOR Q3 production and they produced 12% more NG than they produced in the same quarter in 2018. For the first 9 months of the year, NG production gained 5% over the same period in 2018. Gulfport is one of the largest suppliers of natural gas in the USA with annual revenues over $1 billion. Natural gas prices have declined by almost 30% this year and a company in the business of producing this commodity should likely see it fortunes decline accordingly. Companies like Conoco Phillips, Exxon and Devon Energy have seen their shares drop 30-60% this year. Yet Gulfport shares have dropped from $9.00 to today’s current level in a year of increased production. The question is not “should GPOR shares have declined”, of course they should have, just like their peers. The question is “have GPOR shares dropped too far”. We believe they may have. The fact that GPOR has a book value almost nine times the current price is the big tell that GPOR shares may be oversold. Sixteen Wall Street analysts have issued price targets for Gulfport Energy in the last 12 months. Their average price target is $8.95, suggesting that the stock has a possible upside of 246.83%. Compare GPOR shares to the shares of their peers and you may reach the same conclusion we have. The Traders News Group original report below This One Lit Up Our Value Radar The book value is 8.75X the current price Insiders, institutions and the company are all buying shares Good day everyone, We are initiating coverage on Gulfport Energy Corporation (NASDAQ: GPOR), a company engaged in the production of natural gas, crude oil, and natural gas liquids. GPOR is one of the largest producers of natural gas in the contiguous United States. They hold significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, Gulfport holds an approximately 22% equity interest in Mammoth Energy Services, Inc. and has a position in the Alberta Oil Sands in Canada through its 25% interest in Grizzly Oil Sands ULC. Statistics: Current price $2.58 per share Book value $22.63 per share Revenues $1.4 billion P/E trailing .82 Growth in the top line and bottom line four years running GPOR has a FYE of December 31st and they are scheduled for a Q3 earnings release on or about October 31, 2019. We don’t know what the financial results will be, but the company has released Q3 production results already and production is UP across all its verticals. 52-week range is $2.28 to $10.45 (currently trading at 76.7% off the 52-week high). Petroleum and gas prices are soft, but they have been lower. The investment community will often run away from producers of these products during periods of weak pricing, lowering the price of the stock. In the case of GPOR the stock price has fallen further, much further, than the commodity pricing should indicate. Here’s what those in the know are doing: Insiders have purchased 65,000 shares in 2019. There have been no recorded sales by insiders in 2019. Institutional Ownership Percentage: 97.52% and are still buying. The company itself has repurchased several thousand shares. Sixteen Wall Street analysts have issued price targets for Gulfport Energy in the last 12 months. Their average price target is $8.95, suggesting that the stock has a possible upside of 246.83%. As the chart below indicates, GPOR shares are trading below their 50 DMA and 200 DMA of $2.81 and $5.57 respectively, with a current RSI (14) of 43.46. These data indicate GPOR shares may be oversold. Do your due diligence and see if you agree that GPOR shares could represent a value opportunity. Updates on GPOR will be issued soon. The Traders News Group |
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