SandRidge Energy, Inc. (fka SDOCQ)

[sbcjr77]

Light at the end of the tunnel
SandRidge Energy hasn't been as fortunate as Frontier, despite returning to profitability, and handily beating analyst estimates. Its recently completed acquisition of Arena Resources burdens it with debt just at the time that revenues are weakening more than the Street thinks they should be. While SandRidge beat on earnings, revenues were a huge miss. The market has bludgeoned the stock price, sending it down more than 60% over the past 12 months. In fact it's down over 50% just this year.

Seems the market is discounting SandRidge's move into oil, which gives it a more diverse revenue stream going forward. When natural gas recovers -- and no one really doubts that it eventually will -- SandRidge stands to gain on both fronts, perhaps more than Chesapeake Energy (NYSE: CHK) as a natural gas pure play.

This stock is crazy oversold at this point, when you account for the joint assets after the merger. This is either an easy 5 bagger from here, or a takeover candidate at these levels. Even if you assume oil and nat gas NEVER increase again, and even decline from the levels we are currently at, this stock is grossly undervalued. Strong insider buying now.