AAPL 175.04 4.3271% MSFT 427.93 1.1033% GOOG 160.79 1.9853% GOOGL 159.41 2.0943% AMZN 189.05 1.6671% NVDA 906.16 4.1097% META 523.16 0.6406% TSLA 174.6 1.6535% TSM 147.2 0.6702% LLY 759.59 -0.3137% V 275.68 0.4372% AVGO 1382.46 4.5441% JPM 195.43 -0.0205% UNH 441.72 -1.8509% NVO 125.4 0.3762% WMT 60.09 -0.8743% LVMUY 171.12 0.5228% XOM 121.78 -0.3437% LVMHF 857.08 0.5255% MA 468.31 -0.1833%

Diversified Opportunities Report

SandRidge Energy, Inc.

Mar 02, 2023

SD:NYSE
Investment Type
Small-Cap
Risk Level
Action
Rec. Price ($)

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

SandRidge Energy, Inc. is an independent oil and gas firm focusing on acquisition, development, and production. The company's principal operating regions are in Oklahoma and Kansas on the Mid-Continent. The Company owns or has a stake in about 1,442 gross producing wells, 947 of which it operates, and over 551,000 gross total acres under lease, predominantly in Oklahoma and Kansas.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

Having a bigger profit margin than the industry standard, SD is more adept at cost management, negotiating favorable terms with suppliers, and achieving higher levels of operational efficiency. A higher current ratio compared to rivals also suggests that the company is managing its working capital and short-term liquidity well.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~37.49% of the total shareholding, signifying diverse shareholding. Icahn Associates Corporation and The Vanguard Group, Inc. are the biggest shareholders, holding the maximum stake in the company at ~13.07% and ~4.48%, respectively.

1.5 Natural gas and Oil prices analysis:

On Thursday, WTI oil futures held steady above USD 78 per barrel as investors balanced expectations for a pickup in Chinese demand against worries about more Federal Reserve policy tightening. Oil prices rose by about 1% on Wednesday as top executives from Chevron Corp. and Saudi Aramco expressed optimism about Chinese demand and statistics showed solid manufacturing and services activity in China. Raphael Bostic, president of the Atlanta Fed, meantime, urged continuing rate increases to levels beyond 5% to prevent inflation from rising once again. According to the most recent ISM data, the US manufacturing industry shrank in February for the fourth straight month, raising more concerns about weak demand at a time when inventories are still increasing. Apart from that, Russia recently disclosed its plans to go beyond its previously stated output limitations of 500,000 barrels per day and cut oil shipments from its western ports by up to 25% in March.

US natural gas futures were trading at about USD 2.7/MMBtu at the beginning of March, up from a 29-month low of USD 2.1 on February 22. This increase came about because of a decline in domestic gas supply and an increase in gas flows to LNG export facilities. As a result of energy companies scaling down their drilling plans due to lower prices and the severe cold that earlier in the month frozen several oil and gas wells, the average gas output in the Lower 48 States of the US decreased to 97.5 bcfd in February from 98.3 bcfd in January. While Freeport LNG's export plant gradually resumed operations following the fire-related outage in June 2022, LNG exports have increased in the meantime. Several analysts, meanwhile, are skeptical that the facility will be ready to operate at full capacity by the end of April. Although the colder weather is anticipated to remain through March 15, the US gas demand is likely to decrease the following week due to anticipation that power producers would use less gas to create electricity. Lastly, for the week ended February 17, gas stocks increased by roughly 15% over their 5-year average.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of Q3FY22:

Section 3: Key Risks and Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

  • In the past three months SD share price has corrected by around 27.64%, while around 29.64% in the past six months.
  • The stock is leaning towards the lower band of its 52-week range of USD 29.28 and 52-week low price of USD 13.22, with the current price near a decent support zone of USD 13.00-USD 14.00.
  • The price is currently below both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of around 41.66. 

4.2 Fundamental Valuation

Valuation Methodology: Price/ Earnings Multiple-Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 01, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.


Disclaimer-

Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.

Kalkine Media LLC, an affiliate of Kalkine Equities LLC, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.