This Just In: Upgrades and Downgrades
Did anything wrong to inspire the downgrade -- quite the contrary. When Northland told investors to buy Kodiak back in July, it had assigned the stock a $10 "price target." On Tuesday, Kodiak shares hit that target. So really, all Northland did on Wednesday was declare "mission accomplished," take its winnings, and start tallying up its profits. So there's nothing to see here, folks, move along -- right?Actually, no. I personally think there's a very strong argument -- three of them, in fact -- for going a step further than Northland did yesterday. For not just downgrading the stock to "market perform," but actually going out and selling Kodiak Oil & Gas. And now I'll tell you why...
Kodiak: The bear argument(s)
Right off the bat, Kodiak looks like a poor choice for a profitable investment. The company sells for 53 times earnings today, versus long-term earnings growth expectations of about 20% annualized. True, analysts on average expect to see Kodiak's P/E drop to 10 next year as earnings rebound strongly in 2012. But assuming this stellar one-year growth is built into the long-term 20% growth rate (as is logical), I still see Kodiak as a stock selling for a 2.6 PEG ratio -- and not the 0.5 PEG that its fans may cite.
The initial requirement is expected to be 8.5 million cubic feet of gas a day, a fraction of the capacity Victoria will actually have on tap. Victoria's two wells flowed at a combined 77 million standard cubic feet a day, although the network has a
The field's floating production, storage and offloading vessel (FPSO) has installed production capacity of 225000 barrels of oil per day and 150 million standard cubic feet per day (mmscf/d) of gas. The oil and gas industry regulator, the Department of
Offshore oil output may drop by 156020 barrels a day and gas output may fall by 2549 million standard cubic feet a day, R. Priyono, chairman at the regulator, BPMigas, said during a parliament hearing in Jakarta today.