Trends, Charts and Exclusive Opinion
Three SmallCaps that are Big Time Players
ATPG: Co has Plenty of Producing Assets to Offset Any Delay
SBGI: Fresh; a New Station Manager and Two New VPs
WSII: Regardless of the Merger; Excellent 2010 Guidance
First up this morning we have ATP Oil & Gas Corporation (ATPG) http://www.atpog.com/ currently trading in the $11.79 range. ATPG has a 52-week high of $23.97 set on 04-15-10 with current trailing twelve month revenues of $323+ million. Earlier this month ATPG declared a quarterly cash dividend on its 8.0% Cumulative Convertible Perpetual Preferred Stock. The dividend rate is $2.00 per share and is payable on July 1, 2010 to shareholders of record at the close of business on June 15, 2010. Nice. ATPG is an international offshore oil and gas development and production company with operations in the Gulf of Mexico and the North Sea. Also earlier this month, Moody's Investors Service lowered its outlook for ATPG to "negative" from "positive" because the moratorium on drilling in the Gulf of Mexico deep water will delay some of the Company's production. After all the recession debacles at all the ratings agencies, I didn’t know Moody’s was still in business. Huh… guess I wasn’t keeping track, sorry, anyway back to ATPG, nobody knows the exact length of the deepwater moratorium and the two ATPG Telemark deepwater wells, whether delayed or not, aren’t ATPG’s only assets: As of December 31, 2009, ATPG had estimated net proved reserves of approximately 135.2 million barrels of crude oil or other liquid hydrocarbons equivalent, of which approximately 91.3 million were in the Gulf of Mexico and 43.9 million in the North Sea. ATPG also owns leaseholds and other interests in 62 offshore blocks and 104 wells, including 19 subsea wells in the Gulf of Mexico, as well as interests in 11 blocks and 3 company-operated subsea wells in the North Sea. ATPG had reserves of approximately 77.9 million barrels of crude oil or other liquid hydrocarbons and 343.3 billion cubic feet of natural gas. ATPG is a long-term (1 Yr) ‘Buy’ consideration for me; now priced at less than half its high.
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Next up we have Sinclair Broadcast Group Inc., (SBGI) http://www.sbgi.net/ currently trading in the $6.84 range on a 3-Month average daily trading volume of 560,943 shares. SBGI has a 52-week high of $7.96 set on 04-26-10 with current trailing twelve month revenues of $671+ million. As of December 31, 2009, SBGI owned or provided programming and operating services pursuant to local marketing agreements, or provided sales services pursuant to outsourcing agreements to 58 television stations in 35 markets. I wrote about SBGI for SCN in ’09 and gave it a ‘Buy’ consideration; I’m going to stick with that in the short-term (1 Mo). Fresh Thinking: Last week SBGI announced that Mary Margaret Johnson has been named General Manager of WMMP-TV (MNT 36) in Charleston, South Carolina. Ms. Johnson will also be responsible for oversight of WTAT-TV (FOX 24), which is programmed by Sinclair under a time brokerage agreement. Congrats Ms. Johnson and on June 7, SBGI Dave Schwartz to VP of sales and Rob Weisbord to VP of new media. Schwartz most recently served as director of sales for Sinclair. Weisbord had served as director of digital interactive marketing. Congrats gentlemen.
Finally this morning we have Waste Services Inc., (WSII) http://www.wasteservicesinc.com/ currently trading in the $12.56 range on a 3-Month average daily trading volume of 110,382 shares. WSII has a 52-week high of $12.22 set on 06-18-10 with current trailing twelve month revenues of $458+ million and a positive, corresponding diluted EPS of +$0.34. I like those earnings. As of December 31, 2009, WSII serviced approximately 86,100 commercial and industrial customers and approximately 7.2 million residential homes, as well as operated 7 landfills, 21 transfer stations, 13 recycling facilities, and 34 collection operations. Earlier this month there was an 8-K filing for WSII officially notifying and announcing a Special Meeting of WSII’s shareholders to be held on June 30, 2010, to approve the proposed merger with IESI-BFC Ltd. I looked over the Quarterly filing for WSII and really liked what I saw in its stand-alone guidance for 2010, excluding any effects of the contemplated merger with IESI-BFC. Some of the numbers looked like this: Revenue in the range of $480 million to $500 million, adjusted EBITDA margins of 25% to 27%, EPS in the range of $0.50 to $0.55 per share, and free cash flow of $50 to $55 million. I don’t know the complete, overall ramifications if the merger goes through and I’m always skeptical about considering a stock so close to its high, but WSII seems like a $15 stock trying to get to its next threshold, so it’s a short-term (6 Mo) ‘Buy’ consideration for me.
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