OIL & GAS CORP (KOG)
the radar” Bakken Shale oil and gas company could have big upside
potential. On his January 12th episode
of mad money, Jim Cramer was screaming “buy, buy, buy” on the pull
It hit Zacks Rank Buy as a “1” ahead of the
recent rally and Jim Cramer’s call, but the recent pullback may
be reason for us to look to Kodiak again
for another run.
Description & Developments
oil cannot stay out of the headlines.
More importantly, you can’t pry it from the needy hands (and machinery)
of much of the world’s citizens, especially when it comes to
us in the in the United States of America, we are doing all we can to
our foreign dependence on oil. Projects
like the Keystone XL pipeline which will bring Canadian Oil from their
sands will help us break this dependence.
But we need to do more!
Bakken Shale which spreads widely over the northwestern US (Montana,
Dakota) and into Canada is said to have reserves richer than some of
oil producing countries in the middle east.
The US Geological Survey estimated that there are undiscovered volumes
of 3.65 billion barrels of oil, 1.85 trillion cubic feet of dissolved
gas and 148 million barrels of natural gas liquids contained within it.
Oil & Gas, along with several other
companies primarily operate in that region.
Along with new discoveries Kodiak Oil & Gas stands to reap the
rewards of high priced crude oil,
new supply and rising natural gas prices, which have been depressed for
we do start to see colder temperatures here in
the US, you can expect some bullish pressure on Natural gas prices,
should reflect positively for Kodiak Oil & Gas. This
winter has been unusually mild.
Kodiak Oil & Gas is a mid cap company that is trading
a little over 50 times trailing earnings (P/E), which is a little rich
glance. Looking forward, Zacks Consensus
Estimates sees Kodiak’s P/E dropping to 10, with no change in price
levels. That’s much more acceptable and cheap for an exploration
company like KOG. Kodiak Oil & Gas is expected to
earn $0.25 in FY2011 according to the Zacks Consensus
Oil & Gas recently moved into a Zacks Rank 1, when
we noticed several analysts upgrading their forward earnings outlooks.
The company has been showing explosive
year over year growth in revenues.
have yet to see results for the full FY2011, but Kodiak Oil &
Gas is making strides to improve profitability and is
running at an operating profit margin of about 27% for 2011 thus
are for Kodiak Oil & Gas to make
21 cents this quarter when they report on March 8th. Future
earnings estimates have been on the
rise over the past months, but there were 2 out of 16 analysts who
lowered their future
expectations for FY2012.
is no doubt that Oil and Gas exploration can be volatile, but if you
looking for capital appreciation, these stocks have that
Oil & Gas surprised analysts to the upside by 20%
Performance & Techincals
Kodiak Oil & Gas is currently trading $1.35 under its 52
week high of $10.41. The
stock has been on a serious tear over the past three months, more than
in value from its closing lows in October of around $4.00
the past year Kodiak Oil & Gas
has outpaced the S&P 500 by 48% and in the past 3 months alone
has gained 40%
versus the index. The
recent pullback is giving would-be bullish investors a chance to ride
oil and gas train if they so choose.
look good and the stock remains in a bullish ascending
Look for the 50 day moving average of $8.65
as support and perhaps a trigger for entry.
A Levy is the Momentum Stock Strategist for Zacks.com. He is also the
charge of the market-beating Zacks
Whisper Trader Service.