Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Paul Senior who wrote (43131)	6/29/2011 9:30:13 PM
From: E_K_S	Read Replies (1) of 78680

Hi Paul - Re: Devon Energy Corporation (DVN) The stock meets my Buffet test where LT Debt/Annual Net Income $6.8B/$1.63B = 4.17 s/b <= 4.00. At 4.17 it is w/i acceptable range. At PE around 9 it is close the the PE of the major integrators which provides a good value. I like that the company has a profitable and growing Midstream business too. This generates good cash flow. I have seen this name come up from time to time in my research of the small E&P companies. It's provides a good pure play for the onshore shale sector. I think my eventual exit strategy for my basket of small cap E&P companies will be to peel off shares and put the proceeds into a company like DVN. DVN should participate in the growth of the sector but w/o the wild ride you get with the small caps. However, the 70% drop in price in 2008/2009 would be brutal but it probably was less than many of these small cap E&P I own now. The key metric for DVN is they do not carry that much debt based on their annual earnings. They also control substantial acreage which they can develop. I will add to my watch list and see if I can build a position once my small cap E&P companies mature. EKS

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next