Double Eagle Petroleum (DBLE)

[OilStockReport]

Low price-to-sale ratios w/ this one...

Double Eagle Petroleum (DBLE) – As with any oil company, there is a necessity to replace its reserves while producing. The cost of exploration and acquisition is high, which is some of the reasons for narrow industry margins. As of the time that this article was written, the price to sales ratio was only 2.0. The industry is recorded at 5.44(numbers vary slightly according to source).

One year sales growth is 22%, and this is similar to the 5 year average. Of course, quarter over quarter sales growth between years is down roughly 30%, which is disconcerting. With only one analyst covering the stock, it is hard to get a good read on the future earnings prospects. As well, there is a lot of fluctuation in this company as sometimes they use derivative instruments to hedge, and other times they don’t.

Based on a simple price to sales ratio and increases in sales between fiscal years, this could be a good small cap oil play.