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In theory the RS shouldn't effect the value and therefore the percent gain/loss. I know many people have had bad experiences with other RS companies.
We shall see.
Getting out now and getting back in later could be a good strategy. However, you might miss a big move up, so kind of risky.
I will stay in and possibly take a hit now and wait for CRC divestments and higher oil price later. My timeline is 2 years, so not really concerned yet.
You have to google it. Someone in the investment banking field sent it to me. I am not sure it's available to non subscribers.
Management is being really cautious with the RS. If oil price really drops, it doesn't want to repeat what happened - many hedge funds, private equity, indexes dropping them due to fiduciary obligations. That being said, most likely the RS is hurting the stock now. CRC management is planning for the longer term - take the hit now and benefit later. Lots of FCF at these oil prices.
CRC is definitely being discounted because of the RS.
Saudi has everyone afraid to invest (in oil and gas stocks, drilling, etc.) right now - on purpose they have created a lot of uncertainty.
Huge disconnect between value (using this oil price and forward strip price) and the stock price right now.
Rare situation, if the market starts feeling like this price is a floor then these stocks will hockey stick up quickly.
If these oil prices hold or increase, these small market capitalization O&G companies are the deal of the century right now.
Lots of free cash flow. CRC's Breakeven is $27/BO Brent and 1/2 the production this quarter is hedged at $50/BO.
The RS was needed so various hedge funds and private equity could purchase CRC. It should increase demand and price.
CRC needs a good oil price and a big divestment to thrive.
California Resources Corp (NYSE:CRC) Has 247 Percent Potential to Increase
By Danial Clarke - May 9, 2016
California Resources Corp (NYSE:CRC) shares traded -8.73% during the most recent session. Wall Street analysts covering the stock are projecting that the stock will reach $2.13 within the next 52-weeks. Since analyst price targets calculations are subjective, there often can be a wide range of targets from various analysts.
Taking a broader look brokerage firms’ analysts on the street with an expectant view have high price target of $6.00 and with a conservative view have low price target of $1.00 based on 8 opinions, anyhow if seeing it from optimistic overview then it has a 247 percent upside potential from the latest closing price of $1.73. This is the consensus price target based on the analysts polled by Thomson Reuters’ First Call, the average is taken from the individual analysts which provided targets and are short term projections for the 12 months.
In order to reach at price target analysts use several metrics to determine where stock might be headed, among commonly used metrics is PEG. The PEG ratio is used to determine a stock’s value while taking the company’s earnings growth into account, and is considered to provide a more complete picture than the P/E ratio. While a high P/E ratio may make a stock look like a good buy, factoring in the company’s growth rate to get the stock’s PEG ratio can tell a different story. The lower the PEG ratio, the more the stock may be undervalued given its earnings performance. The stock has a current PEG of 0.07 where as its P/E ratio is -2.40.
While considering growth estimates of the company, it has next quarter growth estimates of 45.50% whereas during current quarter it has -15.40% estimations over growth, comparing to the estimations of 11.10% during current year and 86.10% for next year. Looking forward for the next 5 years it has a strong prediction of -36.80% over growth.
One more important factor to consider when evaluating a stock’s current and future value are the 52 week high and low levels. California Resources Corp (NYSE:CRC) shares are trading -80.37% away from the 52-week high mark of $8.81 and +515.66% far from the 52-week bottom of $0.28. The stock observed 52 week high on May 12, 2015 and 52 low on Feb 25, 2016.
California Resources Corporation (CRC), an independent California-based oil and gas exploration and production company, on May 5, 2016 announced an adjusted net loss of $100 million or ($0.26) per diluted share for the first quarter of 2016, compared with an adjusted net loss of $97 million or ($0.25) per diluted share for the first quarter of 2015. Adjusted EBITDAX for the first quarter of 2016 was $124 million, compared with $198 million for the first quarter of 2015.
Based on the way CRC has traded, IMO the RS discount is already "baked in the cake." Many investors don't like the RS. Therefore going forward it shouldn't make a ROI difference.
Based on the way CRC has traded, the RS discount has already taken place - baked in the cake.
Yes, it's at the end of this month.
Pre RS.
As mentioned before, CRC is a leveraged oil price play. It's looking like it will take awhile longer for supply/demand balancing. Seems like Saudi (new prince) wants another oil price dip to clear the market. The lower oil prices go, the faster it will clear.
Timing this market due to unknowable supply disruptions, etc. is not possible. My guess is it will take another six months to one year for CRC to achieve its price target.
If it wasn't painful everyone would do it.
Raymond James just published a very good analysis of CRC - could this be the worlds only e&p with positive fcf at $34 oil in 1Q16?
I suggest everyone google the paper and read it.
Target price: $7/share
The CEO has to deliver a big deal by year end. I am very optimistic CRC will deliver.
The CEO said a big deal would be announced before the end of this year. Plenty off offers, just hasn't pulled the trigger yet.
The midstream sale is a big one.
Please put down the MJ pipe!
The reverse split shouldn't affect the valuation. Beat earnings estimate and met production targets. Nothing earth shattering really. A little disappointed no divestiture announcement.
Steady earnings announcement.
Just waiting on the earnings announcement. Uncertainty causes a discount.
Just moving with oil price.
If the earnings are good, May 5th should be a big day.
Ridiculous.
Amazing, I guess the CFO and chief legal were destroying value.
Haha!
And much lower decline rates versus fractured shale companies.
The short-term oil price is anyone's guess. Longer term CRC will be good.
The price of oil is by far the most important driver of CRC's stock price.
Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission (CFTC) weekly Commitments of Traders report — dumped 12,118 short contracts last week and added 8,733 long contracts. The movement reflects changes as of the April 19 settlement date. Managed money holds 297,733 long positions compared with 75,862 short positions. Open interest totaled 1,714,186. There were 53 hedge funds with large short positions last week, down by three compared with the prior week.
Yep, way too much marijuana.
??lol...
Ask yourself if that was true how is CRC able to reduce their debt with much lower oil prices? Look at the past financial statements. If $65/BO was the Breakeven no bank would loan CRC anything and they would be bankrupt.
Totally ridiculous.
You must be short, it absolutely not true. Many shorts try to scare people like blue mountain - short the stock then put out bad articles. This is legal believe it or not.
The banks approved the $1.8B borrowing base. The nearest term due is 2020. CRC has 640 MMBO proven reserves and produced about 155,000 BOE per day.
The Breakeven is $27/bo brent with the hedges in place. I have listened to all the quarterly earnings. The next announcement is May 5th.
I have worked California oil field for over 30 years and $65/bo Breakeven is laughable!
What is getting CRC way now is its $6billion debt. Any sale and/or debt reduction announcement and CRC hockey sticks up.
You don't want to be out when the announcements come. Timing this stock can be hazardous to your wealth.
CRC is the largest oil and gas producer in ca. It's the largest land owner, and has over $1billion worth of pipeline and midstream assets. The cash Breakeven with hedges is about $28 per bbl Brent. Now oil price is $45/bo and rising.
CRC has a huge upside potential $5-6 PPS at $45/bo plus price. Think about just the JV potential with all the land ownership.
CRC needs to make some announcements... Midstream/property sale. This company is moving way too slow!!
Yes, I wish they would sell something. If $42 Brent holds then $2-3 PPS will follow.
I agree CRC needs to consummate some deals...
It will happen, not sure about the target price. Helps in getting CRC included in various indexes/funds that have that $1 min. constraint.
No, but i have a lot of CRC stock. I think the bonds are a good deal. Most likely CRC will try to pay a lot of this debt off early with midstream asset sales.
CRC has not and is not defaulting on its debt. It restructured the debt moving some from unsecured to secured saving over $550 million. Bond holders had an option to change - with lower risk (secured) receive a lower yield.
Depends on oil price. If it increases as expected CRC will do well. Need some announcements!
Yep, looks like most of the dividend sales have cleared!
Yeah, it's not over yet.
I hope it does drop to $0.3, so I can buy big time.
CRC Oxy dividend sales have to clear before CRC can advance. It's a lot of shares so no telling how long it will take. Note, Oxy held mutual funds, etc. can't hold CRC.
All the Oxy dividend sales need to clear for CRC's stick to thrive.
I am looking 6 months to a year, not a short-term trader. I have no idea when an announcement will occur, and don't want to be short or out.
Yes on 03/24/16 it was given as a dividend to Oxy shareholders. Many of the funds can't hold CRC, so stock weakness was expected.