The recent rally in the price of Manitok Energy Inc.
, Stock Forum
) shares continued Friday as the stock gained another 2.7% to $3.01, leaving a market cap of $211 million, based on 70 million shares outstanding.
At current levels, the stock is up smartly from $2.20 in mid June, 2014.
The move comes on the heels of a bullish report that was posted on the Seeking Alpha website
. It describes Manitok as “highly undervalued and poised for price appreciation.’’
Manitok Energy is a junior producer of conventional oil and gas with operations in Alberta, Canada. The company’s primary focus to date has been on the Stolberg structure in the Alberta Foothills, a liquids-rich natural gas play.
Manitok has clearly proven that it is adept at operating in this area and its production and cash flows are growing significantly as a result, according to the Seeking Alpha report, which makes the following key points:
FULL DISCLOSURE: Manitok Energy is a client of Stockhouse Publishing.
Manitok is a highly undervalued junior oil and gas company and has well over 100% 6-12 month upside and even higher upside longer term.
The stock is undervalued relative to its peers by 125% based on EV/EBITDA, 155% based on EV/Production, and 100% based on EV/IP proven reserves, and trades at 2.87 x Q1 2014 annualized cash flow.
Exceptional continuing growth with a debt/cash flow ratio of 0.4 in Q1 2014 and a stated corporate goal of maintaining debt to cash flow less than 1.25x.
Affirmed guidance on June 19 of annual production increases of +48% and funds from operations of +68%, yet it still trades at an irrational discount to peers.
Due to positive drilling results released last week, it’s extremely likely Manitok will hit year-end guidance, causing much of the large discount to unwind.