Savvy Trades and Investments

[SSKILLZ1]

NOG

A Oil and Gas Driller

I initiated a position today in NOG at $23.48. I can't believe I was able to get these prices with oil over $100 a barrel last I checked. Here is what I like.

1) NOG pays a well maintained Dividend of $1.80 annually which is roughly slightly above 7.65% where I brought it. So that is definitely getting paid while you wait.

2) NOG will probably take advantage of these prices by hedging these prices, so they can continue to easily pay the dividend for many quarters ahead regardless what happens to energy prices. But they will benefit a bit from higher entry prices as well.

3) NOG Trades cheaply for it's peers, I think given it positioning a 8x-10x multiple and I think they could earn north of $4 going forward even if oil comes in to say the 80's at some point. Hence I think FV is at least low to mid 30's here.

Conclusion: I like NOG just in case oil prices stay high this is my energy play, I also feel relatively confident they will be able to earn good money to easily cover the dividend when/if oil comes way down. The stock hasn't really benefitted from this surge in oil prices either in my opinion. All is just my opinion, and I could always be wrong though.