SD - SandRidge Energy

[LC]

Anyone adding during this price drop?

I sold a few $5 april puts...somewhat hoping I get put to. If not, I might pick up some shares regardless.

[stahleyp]

The 2015 puts with a strike of $5 are selling for $1.50 or so.

[valueorama]

The 2015 puts with a strike of $5 are selling for $1.50 or so.

 

I saw that and i am tempted.  But it could easily be a 2yr endeavour with no result and tie up your cash.

[tombgrt]

Six months ago this company was valued at almost $4b by Mr. Market. A lot has changed since then and I would say mostly for the better. For example, you have an activist on the board looking to focus on ONE strategy, cutting the fat and slowing down capex spending. Leverage has gone down as well compared to the company's past (lowest ever?).

 

I don't know whether a $4b market cap is too much (or little) but the stock price does seem a little irrational at this point compared to the company's fundamentals. What are current sellers afraid from? (And yes I said this was too ugly for me but I actually like the news on the board change, keeping Ward for now. I didn't expect this big a drop, quite the opposite in fact! This is what lures me to this topic again. ;))

 

 

If anyone has an idea on the bold question, I would love to hear your opinion! TIA

[Shane]

3 months ago the price peaked at $7.24 and is now $4.88.  Was the market really putting a 34% premium on Ward's position as CEO even when it was in question?

[luck]

yeah, i agree dinakar singh seems like a smart guy in interviews, goldman's top trader for awhile.  his fund has done pretty well. 

 

i don't see any material change in the business since the activists have taken over.  there are definitely alternatives to ward as far as striking deals and so forth that are probably just as good and my guess is singh and company will figure out a solution. 

 

right now, executive selling, stop losses hit, the long proposition not being as clear cut as other stocks might take this to the three's at this rate.  i'm definitely a bit surprised by mr. market's price action after the activist's deal.

[Guest hellsten]

Six months ago this company was valued at almost $4b by Mr. Market. A lot has changed since then and I would say mostly for the better. For example, you have an activist on the board looking to focus on ONE strategy, cutting the fat and slowing down capex spending. Leverage has gone down as well compared to the company's past (lowest ever?).

 

I don't know whether a $4b market cap is too much (or little) but the stock price does seem a little irrational at this point compared to the company's fundamentals. What are current sellers afraid from? (And yes I said this was too ugly for me but I actually like the news on the board change, keeping Ward for now. I didn't expect this big a drop, quite the opposite in fact! This is what lures me to this topic again. ;))

 

 

If anyone has an idea on the bold question, I would love to hear your opinion! TIA

 

I'm afraid of what happens when (if?) Tom Ward and his cohorts leave. I guess the outcome won't be too bad with value investors behind the company. I just added to my position.

 

Here's food for thought:

http://www.wolframalpha.com/input/?i=natural+gas+vs+sd

[Parsad]

Six months ago this company was valued at almost $4b by Mr. Market. A lot has changed since then and I would say mostly for the better. For example, you have an activist on the board looking to focus on ONE strategy, cutting the fat and slowing down capex spending. Leverage has gone down as well compared to the company's past (lowest ever?).

 

I don't know whether a $4b market cap is too much (or little) but the stock price does seem a little irrational at this point compared to the company's fundamentals. What are current sellers afraid from? (And yes I said this was too ugly for me but I actually like the news on the board change, keeping Ward for now. I didn't expect this big a drop, quite the opposite in fact! This is what lures me to this topic again. ;))

 

 

If anyone has an idea on the bold question, I would love to hear your opinion! TIA

 

I'm afraid of what happens when (if?) Tom Ward and his cohorts leave. I guess the outcome won't be too bad with value investors behind the company. I just added to my position.

 

Here's food for thought:

http://www.wolframalpha.com/input/?i=natural+gas+vs+sd

 

Not a good comparison.  NGS spends only 68 cents of every operating dollar on capex.  SD in the last year spent three times operating cash on capex!  If SD capped capex at the same 68 cents per dollar as NGS, SD would have made almost 55 cents per share...a 9 times P/E.  I think you will see TPG and the board reduce capex enormously.  Cheers!

[Guest hellsten]

Six months ago this company was valued at almost $4b by Mr. Market. A lot has changed since then and I would say mostly for the better. For example, you have an activist on the board looking to focus on ONE strategy, cutting the fat and slowing down capex spending. Leverage has gone down as well compared to the company's past (lowest ever?).

 

I don't know whether a $4b market cap is too much (or little) but the stock price does seem a little irrational at this point compared to the company's fundamentals. What are current sellers afraid from? (And yes I said this was too ugly for me but I actually like the news on the board change, keeping Ward for now. I didn't expect this big a drop, quite the opposite in fact! This is what lures me to this topic again. ;))

 

 

If anyone has an idea on the bold question, I would love to hear your opinion! TIA

 

I'm afraid of what happens when (if?) Tom Ward and his cohorts leave. I guess the outcome won't be too bad with value investors behind the company. I just added to my position.

 

Here's food for thought:

http://www.wolframalpha.com/input/?i=natural+gas+vs+sd

 

Not a good comparison.  NGS spends only 68 cents of every operating dollar on capex.  SD in the last year spent three times operating cash on capex!  If SD capped capex at the same 68 cents per dollar as NGS, SD would have made almost 55 cents per share...a 9 times P/E.  I think you will see TPG and the board reduce capex enormously.  Cheers!

 

Sorry, I thought I posted a graph comparing the price of natural gas to SD. This is the correct link:

http://www.wolframalpha.com/input/?i=natural+gas+price+vs+sd

[Parsad]

Ah, ok that makes more sense!  ;D  Cheers!

[alertmeipp]

http://www.thestreet.com/_yahoo/video/11886606/buy-sandridge-at-5.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1

 

 

At the end, it says don't put more than 5%... Sanjeev, you are way over-weighted on this speculative stock.  ;D

 

I am over 5% for sure.  8)

 

Btw, I added some today.

[Parsad]

http://www.thestreet.com/_yahoo/video/11886606/buy-sandridge-at-5.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1

 

 

At the end, it says don't put more than 5%... Sanjeev, you are way over-weighted on this speculative stock.  ;D

 

I am over 5% for sure.  8)

 

Btw, I added some today.

 

We are WWAAAAYYYY over 5%!  Should I reallocate?  ;D  Cheers!

[plato1976]

With an avg cost of $6

, I am very deeply under water :(

Under water is not sad; the sad thing is I used up my "quote" to buy SD

 

http://www.thestreet.com/_yahoo/video/11886606/buy-sandridge-at-5.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1

 

 

At the end, it says don't put more than 5%... Sanjeev, you are way over-weighted on this speculative stock.  ;D

 

I am over 5% for sure.  8)

 

Btw, I added some today.

 

We are WWAAAAYYYY over 5%!  Should I reallocate?  ;D  Cheers!

[bmichaud]

Couple of interesting sell side notes on SD's valuation.

SD_BMO_Note_3.7.13.pdf

SD_Canaccord_Note_3.7.13.pdf

[plato1976]

Cancord's target of $1 per share is quite brave

 

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

 

Couple of interesting sell side notes on SD's valuation.

[stahleyp]

Cancord's target of $1 per share is quite brave

 

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

 

Couple of interesting sell side notes on SD's valuation.

 

I took a little bit further look at this guy (I didn't do a deep dive though) and found this article. Not quite a year old and 1 out of 7 is close to the target (COG) one is somewhat close (EOG) and well, most are off quite a bit.

 

http://www.forbes.com/sites/canaccordgenuity/2012/06/11/top-oil-picks-post-upside/

 

His top pick, COG, did do really well tough.

 

a few more:

http://www.forbes.com/sites/canaccordgenuity/

[Parsad]

If I paid attention to analysts, I would never have invested in Berkshire (double in one year), Fairfax (triple in five years), Steak'n Shake (quadruple in two years), Bank of America (over double in two years) and now Sandridge.  My best investments have come from ignoring what anyone else has to say about something.  Cheers!

[value-is-what-you-get]

I had to chuckle at the spreadsheets with revenue projections out in 2016.  Beware of geeks analysts bearing spreadsheets!

 

I'll take the 50 cent dollar today thanks, they can keep the spreadsheets!

 

 

[BargainValueHunter]

Couple of interesting sell side notes on SD's valuation.

 

Ouch!

 

http://a2.twimg.com/profile_images/57299498/homer-facepalm-icon_reasonably_small.jpg

[fareastwarriors]

Couple of interesting sell side notes on SD's valuation.

 

Ouch!

 

http://a2.twimg.com/profile_images/57299498/homer-facepalm-icon_reasonably_small.jpg

 

Doh!

[Parsad]

Cancord's target of $1 per share is quite brave

 

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

 

Couple of interesting sell side notes on SD's valuation.

 

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

 

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile

 

Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!

[CorpRaider]

Oh noes! Sell-siders!!

[muscleman]

Cancord's target of $1 per share is quite brave

 

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

 

Couple of interesting sell side notes on SD's valuation.

 

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

 

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile

 

Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!

 

We should thank them for bringing down the share price. If they are not retards, the market will be more efficient, and we will have less opportunity.

[plato1976]

Anyone got an idea at which NG price the West Texas Overthrust will begin to be economically viable ?

$6?

$7?

 

 

 

Cancord's target of $1 per share is quite brave

 

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

 

Couple of interesting sell side notes on SD's valuation.

 

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

 

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile

 

Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!

 

We should thank them for bringing down the share price. If they are not retards, the market will be more efficient, and we will have less opportunity.

[muscleman]

Anyone got an idea at which NG price the West Texas Overthrust will begin to be economically viable ?

$6?

$7?

 

 

 

Cancord's target of $1 per share is quite brave

 

No idea if they have a valid reason (didn't read). But usually analysts tend to give a target pretty close to the current trading price to lower their career risk. So to give a $1 target is at least a brave move if they are honest to their own analysis

 

Couple of interesting sell side notes on SD's valuation.

 

The Canaccord analyst, John Gerdes, had upgraded Sandridge to a target price of $6 last June when it's financial footing wasn't nearly as strong, and there was no oversight on capex, compensation, conflicts of interest or anything else.

 

http://m.theglobeandmail.com/globe-investor/investment-ideas/features/eye-on-equities/canaccord-slashes-price-target-on-fortress-paper/article2434801/?service=mobile

 

Now he suddenly drops it to $1 after they are in the strongest financial position ever, with a brand new board, almost guaranteed reduction in capex, and natural gas prices rising.  He's a retard! 

 

I don't know of any analyst that had predicted, suggested or opined that Sandridge could have gotten $2.6B for the Permian assets...do you think they have any idea what the remaining assets are really worth?  Cheers!

 

We should thank them for bringing down the share price. If they are not retards, the market will be more efficient, and we will have less opportunity.

 

I quickly went throug their past 10-Qs. They started losing money in 2009 Q1, after adjusting gain/loss on derivative contracts and impairment charges.

According to the chart here, gas started trading below $7 at that time.

http://online.wsj.com/mdc/public/page/mdc_commodities.html

 

This means the Texas Overthrust is likely going to worth zero for the foreseeable future.

 

However, since Missisipian Lime has 56% gas production, even if the overthrust doesn't work out, the NAV should still gain handsomely.