Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
largest holding in the small-cap energy exchange traded fund Power Shares S&P Smallcap Energy (PSCE: Nasdaq)is Gulfport Energy
Company (GPOR: Nasdaq), a developer of oil and natural
gas properties.Although some of its
principal properties in North America are along the Gulf Coast, there is more
to Gulfport is more than its name implies.The company has interests in the Canadian oil sands, the Permian Basin
in West Texas, the Utica Shale in Ohio and fields in Colorado.A sixth property is in Thailand.Its market capitalization of new $4.0 billion
its relatively small revenue base of $238 million.That is because Gulfport earned a fat 36.0%
profit margin in the most recently reported twelve months, inspiring investors
to price the stock at 36.4 times trailing earnings of $1.42 per share.
who follow Gulfport do not have such high expectations for near term earnings,
but expect stellar performance in the long term.A recent acquisition in the Utica Shale
region promises to boost future revenue streams.The consensus estimate for 2013 is $0.83 per share
and 2014 $2.02.The stock is price at
25.5 times the 2014 consensus estimate, well below the growth rate built into
earnings models.The problem is Gulfport
has disappointed its followers in three of the last four quarters, suggesting
that sell-side analysts are just a bit out of sync with Gulfport’s real
volume in Gulfport shares is in excess of 1.4 million shares per day. That means about 2% of Gulfport shares not
held by insiders turn over each day. More importantly 9.5 million shares have
been sold short or about 13.2% of the float.Surprise to the upside could put the ‘squeeze’ on short positions and
given the size of short interest have a significant impact on the share price.
without the potential boost from short sellers covering positions, the
consensus is decidedly bullish on GPOR.The consensus rating is buy with a price target of $65.00 per
share.This represents 25% upside from
the current price level.
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of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies