Hottest Cheapest NASDAQ oil stock:
PINN:NASDAQ closed the week up $.80 $3.50, but I think is just starting. PINN is by far the most undervalued Shale gas play IMO. It has very large holdings (500,000 acres) in the hottest shale gas plays in the U.S. including the Green River Basin and Powder River Basin. WHEN PINN CAME OUT AS AN IPO INSTITUTIONS PAID $9 PER SHARE.
The only reason PINN went down so low is a failed merger with QRCP. PINN is now recovering and recovering fast, but is still the only major natural gas company I follow trading BELOW 2007 prices, so I expect much more short term upside. With a 7 MM float, mostly owned by institutions, the PINN float is very tightly held, so PINN could experience rapid appreciation if the Oil and gas momo crowd discovers it.
Fundamentally this stock should be trading 2-5 times where it is and compared to its peers. PINN is currently trading at just over $200/acre ($98,000,000/500,000 acres). This includes substantial infrastructure including 150 miles of natural gas gathering lines! Even with the current production, we should be 2-5 times the current stock value. Take a look at AEZ, KOG or NOG for example which are shale gas / CBM exploration companies with almost zero revenues and yet have substantially higher market caps than Pinnacle:
SHALE GAS COMPANY MARKET CAPS:
PINN: $98 MM
AEZ: $208 MM
NOG: $482 MM
KOG: $388 MM
PINN has 5,000 drilling targets, each well is approximately 0.4BCF of reserves, so total reserves and being conservative is approaching 2TCF.
The reality of it, Pinnacle probably has 4 - 6TCF in its acreage which makes this a multi-billion dollar asset company.
PINN is now starting to get its story out with Analyst meeting this last week- I don't think PINN will be a secret much longer.
