Jul 23, 2010 10:31 AM PDT
Trends, Charts and Exclusive Opinion
It's All About Energy, Energy, Energy
XTEX: Pluses Replace Losses in Y-O-Y Numbers
TRGL: 3M Shares Will Finance Repurchase of Sr. Notes
HERO: Contrary to Downgrade; Q4 & FYE 09 Hopes Push Stock
First up this morning is Crosstex Energy LP (XTEX) http://www.crosstexenergy.com/ currently trading in the $10.56 range on a 3-Month average daily trading volume of 414,195 shares. From April 09 through Aug 09, XTEX was trading between $2 and $4 and in Sept 09 the stock took off rising from $4 to $7 in about a month before falling back to $6 to settle down for a couple of months. In mid-Dec XTEX once again took off from $6 into the $11 range. XTEX has a 52-Week high of $10.99 set on 03-01-10. What I really like about XTEX is that on trailing twelve month revenues of $3.30 billion, it returned a positive, corresponding diluted EPS of $4.03. I also like the fact that XTEX has less than 1% of its public float committed to short-sellers. They know better with this stock. It’s only going to rise over time. XTEX is a long-term (1-Yr) ‘Buy’ consideration for me.
The Q4 09 XTEX ‘Partnership’ reported net income of $55.9 million vs. a net loss of $9.4 million in Q4 08. The net income per limited partner common unit in Q4 09 was $1.09 basic and $1.07 diluted vs. a net loss per limited partner common unit of $0.18 basic and diluted in Q4 08. And- XTEXs 09 operating expense declined $15.4 million, or 12%, to $110.4 million vs. $125.8 million in 2008. With some guidance, XTEX management expects it could generate sufficient distributable cash flow to pay up to $0.30 per unit in distributions relating to Q4 2010 and it expects it could pay up to $0.10 per share in dividends, assuming the receipt of a $0.30 per unit distribution.
XTEX operates as an independent energy company. XTEX operates in two segments, Midstream and Treating. The Midstream segment focuses on the gathering, processing, transmission, and marketing of natural gas and natural gas liquids in Texas Gulf Coast in the north Texas Barnett Shale area, and in Louisiana and Mississippi. It also offers natural gas marketing services on behalf of producers for natural gas.
XTEX 1-Year
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Next up is Toreador Resources Corporation (TRGL) http://www.toreador.net/ currently trading in the $9.69 range on a 3-Month average daily trading volume of 556,712 shares. TRGL spent April, May and June of 09 trading in the $4 range. It then spent the next 3-Months trading in the $5 range. TRGL then jumped to $10 and spent the next 5-Months trading in the $10 range (with a spike in late-Jan towards $15). TRGL has a 52-week high of $13.69 set on 01-22-10. TRGL has trailing twelve month revenues of $45+ million. TRGL has a few more short-sellers than I’d like, but the month-over-month trend is that they are getting out. TRGL is a short-term (6 Mo) ‘Buy’ consideration for me at this price.
Early last month, TRGL offered three million common shares to fund the repurchase of convertible senior notes. TRGL management said the shares, offered at $8.50 a piece would raise approximately $23.5 million and the Company would use the net proceeds, along with cash on hand, to satisfy requests to repurchase its 5% convertible senior notes. Get rid of that expensive debt. TRGL, based in Paris, France as of Dec 31, 09 had a reserve estimate that was 27% greater than in Dec of 08 (proved).
Finally this morning is Hercules Offshore, Inc., (HERO) http://www.herculesoffshore.com/ currently trading in the $4 range on a 3-Month average daily trading volume of 2,606,110 shares. In April 09 HERO was trading in the $2 range and staged a steady climb towards $5 through mid-July. It dipped to $3 by early Aug and then stages another rally to $7 through mid-Sept. HERO then somewhat leveled out for the next 4-Months in the $5 range and then dipped to its current level. HERO has a 52-week high of $7.28 set on 09-17-09. HERO has trailing twelve month revenues of $879+ million. There are some short-sellers of HERO, but nothing to raise a red flag. They will fall out to a more acceptable level when the stock rises again. HERO is a ‘Buy on the Dips’ consideration for me.
In a contrary move this week, HERO jumped up yesterday after receiving a downgrade from a research house. The Q4 09 conference call is underway as this article is being written. As of March 31, 2009, HERO owned a fleet of 31 jackup rigs, 17 barge rigs, 3 submersible rigs, 1 platform rig, and a fleet of marine support vessels operated through Delta Towing, a wholly owned subsidiary, as well as 60 liftboat vessels and 5 liftboat vessels owned by a third party. In addition, the company owns 4 retired jackup rigs and 10 retired inland barges located in the U.S. Gulf of Mexico.
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