GORE REPORT: *** KTNV *** , A Compelling Investment at the Right Time (days or research completed)
****** TOP 5 REASONS TO BUY KTNV BELOW *******
With the shareholder's meeting coming this monday, I thought it was time to really DD this thing. I like what I see.
Last time I did an official "Gore Report" was about a year plus ago on WLGS at 20 cents. Let's hope KTNV enjoys some success as well. I think it will. I expect KTNV to be a steady mover as each quarter's earnings come out. Revenues and net income have dramatically increased in the last 2 quarters under quality new management, and the price of oil is the highest in 9 years and expected to stay very healthy for some time. Look at these quotes from industry pundits regarding oil.
BARRON's ON THE FRONT PAGE (feb. 21) : "Oil Stocks: Gushing with Opportunity"
and inside on page 17, an article entitled "Too Cheap to Ignore"
ANOTHER BARRONS QUOTE (from the article): " the biggest winners, however, are apt to be the hundreds of oil-services companies that typically hit pay dirt on increased drilling... the oil-services sector is going to show 50-80% earnings growth in 2000."
YET ANOTHER QUOTE (from Michael Mayer, an oil analyst at Schroeders & Co., "The outperformance of the tech sector has created the best buying opportunity [in the oil sector] I have ever seen."
YET ANOTHER (from Bear Stearns analyst Fred Leuffer) " They're almost inexplicably cheap."
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BUT WHY IS KTNV SUCH A COMPELLING INVESTMENT?
MAJOR FACTOR #1: New Management has already turned the Company around to profitability (their impressive resumes are below) with huge revenue increases.
MAJOR FACTOR #2: Price is just .26 cents and was $5.25 back in late 1997; stock is trading at well less than book value. In fact: KTNV is trading at Price to Book ratio of .5X compared to industry average of 3.4x (Source: Market Guide/ProVestor Plus Company Report 2/4/2000)
MAJOR FACTOR #3, INDUSTRY STRENGTH: Virtually all agree that the Oil and Gas Industry is strong and likely to remain so for an extended period. Excellent Report from Briefing.com follows
MAJOR FACTOR #4: The Shareholder's meeting is coming this monday, which should be impressive...the first under CEO Jack Wheeler, whose resume is most impressive.
ALERT:
Accumulation is going on.
Over 10 Million shares of ** KTNV ** were accumulated last week (see below) as opposed to less than 1 million shares the week before,
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KTNV: TURNAROUND COMPANY IN A VERY HEALTHY INDUSTRY
** The price of oil and gas is very strong, but so far the sector is not getting much attention, even though
MERRILL LYNCH has a "buy" on a number of companies - in fact on 16 of the domestic service companies.
** Recent REUTERS story suggests that both Mexico and the Saudi's want to keep oil prices high and stable going forward, although they will likely increase production after April 1 to keep world economies going strong.
** From BRIEFING.COM: OIL SERVICES RATED TO PERFORM WELL
OILFIELD EQUIP & SERVICES.........
Their comment: "Group coming back to life over past few days on news that OPEC intends to keep a lid on production beyond the March meeting...General view on street was that OPEC would relax quotas into that meeting... OPEC decision, in conjunction with cold winter weather, means that oil prices will remain firm for at least the next several months, and the longer crude prices hold above $20 bbl, the better the earnings
outlook for the oil services sector as major oil companies will move to increase exploration budgets... Strength in the global economy also bodes well, as it suggest continued strong demand... Add to the favorable industry conditions, ongoing consolidation and bullish technicals and Briefing.com contends that the sector is poised to outperform the market over the near- and long-term... Group could also benefit from
(expected) rotation out of high-flying techs in weeks to come... Two stocks likely to lead the industry higher are Schlumberger (SLB) and Halliburton (HAL)... Briefing.com also likes near- and long-term prospects of secondary plays - Global Marine (GLM) and Transocean Offshore (RIG) Stocks: Baker Hughes (BHI), R&B Falcon (FLC), Global Marine (GLM), Halliburton (HAL), McDermott International
(MDR), Nabors (NBR), Noble Drilling (NE), Schlumberger (SLB), Smith International (SII), Tidewater
(TDW) and Transocean Offshore (RIG)"
FWIW: By: SCAN10
Reply To: None
Sunday, 20 Feb 2000 at 9:38 AM EST
Post # of 308
OIL AND GAS CHART REVIEW
The oil chart is a beauty -- a near-term reverse head
and shoulders, and oil is breaking the neckline to the
upside. Both the fundamentals and technicals in oil are
very bullish
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TOP FIVE REASONS TO BUY ** KTNV **
(note: symbol change announcement expected at 2/28 shareholders meeting along with name change to Aspen Group Resource Corporation)
#1: CLEARLY UNDERVALUED:
KTNV is trading at Price to Book ratio of .5X compared to industry average of 3.4x
(Source: Market Guide/ProVestor Plus Company Report 2/4/2000)
>>>> or just 1/7th of the industry average Price to Book ratio as of report date
>>>> also, the current price of .26 is well below 1997 high of $5.25 when the stock was much less promising than today (although to be honest, shares O/S has increased due to acquisitions, etc.)
***
#2: PRICE: (2/23 price: .26) (high price in 1997= $5.25; 1998= $2.94, formerly on AMEX)
SYNOPSIS: outstanding growth & profitability in last 6 months since new management took control. New management has quickly turned company around and is optimistic going forward; CEO formerly with Sonat (responsible for acquiring $1.6 Billion in reserves), Texaco & other large companies; stock trading well below book value; stock was $5.25 a share in late 1997, interest in 500 properties; shareholder meeting Feb. 28 could attract interest in the stock)
#3: COMPELLING DATA (from a 15-page unbiased report entitled Multex/ProVestor Plus Company Report ? available for $20 through AOL.com or Morgan Stanley I believe) Link: quickenaol.com
** KTNV's TTM Gross margin is higher than the industry avg at 70.8% compared to an average of 27.6%
** KTNV trades at a lower multiple of sales (2.6x) than the industry average of 3.3x
** KTNV trades at a Price to Book ratio of .5x compared to an industry average of 3.4x
(this last stat is the most telling, imo)
from SI:
"KTNV is a development stage independent energy company engaged in the
exploration, and development, acquisition and operation of oil and gas
properties. For the 3 months ended 9/99, total revenues rose 44% to $833K.
Net income totaled $125K vs. a loss of $488K. Revenues reflect production
from newly purchased oil and gas properties. Net income reflects the
discontinuance of equip. ops & the reduction in number of admin.
employees."
Start here: … siliconinvestor.com
Profile: siliconinvestor.com
#4: NEW, QUALITY MANAGEMENT HAS REJUVENATED THE COMPANY:
A primary reason to consider an investment in this Company. Just look at the experience.
Jack E. Wheeler was elected as Chairman of the Board, President and Chief Executive Officer in September 1999. A founding partner of Crown Partners L.L.C. Minerals Division (the predecessor to East Wood), Mr. Wheeler has more than 25 years experience managing oil and gas property acquisition, exploration and development. He is a former vice-president of business development and assistant general counsel of Sonat Exploration Company where he was responsible for the acquisition of over $1.6 billion of oil and gas property acquisitions. As a vice president of the St. Paul Companies, Mr. Wheeler had primary responsibility of developing, overseeing and later divesting St. Paul's $70 million oil and gas investment portfolio. Mr. Wheeler received bachelor's degrees from Lon Morris College and Texas A&M University, a Master's degree from the University of Colorado and Juris Doctorate from the University of Houston. He served with the Fifth Special Forces in Vietnam. Twice nominated for the Congressional Medal of Honor, Mr. Wheeler was awarded the Silver Star, Purple Heart, Vietnamese Cross of Gallantry, Soldiers Medal, Bronze Star for Valor, Army Commendation Medal for Valor, the Air Medal and the Combat Infantryman's Badge.
Bruce J. Scambler was elected Senior Vice-President and Chief Financial Officer in September 1999. He has over 20 years experience in financial management of public companies in the US and UK. As the finance and business planning manager of OGE Energy Corp, Mr. Scambler coordinated development of a strategic program in 1995 which achieved the #1 ranking in the U.S. for least and highest value provider for one of OGE's coal fired electric generation plants. He has also served as business information manager with the UK's national Grid Company, as financial controller of the Consumers Association and finance director of High Advantage PLC. After early training with KPMG London, Mr. Scambler held the positions of finance manager of Kingsway Ventures Ltd. and financial controller of Ecico International Group. A certified public accountant, Mr. Scambler is a Fellow of the Chartered Institute of Management Accountants.
Ron Mercer was elected Vice President for Operations and Acquisitions in September 1999. With more than 28 years oil and gas operations experience, Mr. Mercer has most recently been responsible for the formation and day-to-day operations of Mercer Oil and Gas Co. and Armer L.L.C. He also founded Oklahoma Oil and Gas Management, Inc.,which operated over 300 wells. Mr. Mercer has served as contract property manager for The Ram Group and vice president for property management for Continental Illinois Bank. He was also vice president for contract drilling and drilling manager for Santa Fe Minerals, and one of its acquisitions, Andover Oil Company. Mr. Mercer holds a Bachelor of Science degree in petroleum engineering from Texas Tech University and is a registered professional engineer in
Texas and Oklahoma.
James E. Hogue became President, Chief Operating Officer and a director of Cotton Valley in July 1996 and he served as Chairman of CV Energy from February 1995 to January 1996 and Chairman of CV Trading from May 1995 to January 1996. He became President of CV Energy and CV Operating in January 1996. Mr. Hogue also has been director, President and major shareholder of Third Coast Capital, Inc., a venture capital company, since 1988. Since 1991, Mr. Hogue has served as President of Martex Oil and Gas, Inc. In 1983, Mr. Hogue formed Mayco Petroleum, Inc., for which he served as President until 1988. Early in his career, Mr. Hogue served as a driller for Leatherwood Company and as a core engineer for Sargent Diamond Bit, Inc. Subsequently, Mr. Hogue became President and major shareholder of a
diamond bit manufacturing company. In the late 1970s, Mr. Hogue served for four years as President of Union Crude Oil Company, an exploration and drilling company, and for two years as Vice President of Independent Producers Marketing Company, a crude oil supply and transportation company. Mr. Hogue has participated in drilling or furnishing services for over 3,000 wells in Texas, Oklahoma, New Mexico, Louisiana and Colorado.
Sam Hammons was elected Vice President and General Counsel in September 1999. He has served two Oklahoma Governors as an administrative assistant, the assistant for energy and natural resources, director of the Oklahoma State Department of Energy, and for six years as Oklahoma's official representative to the Interstate Oil Compact Commission. He also served as chairman of the Energy Council of the Oklahoma State Chamber of Commerce and chairman of the 17-state Southern States Energy Board. Mr. Hammons was a partner of the Ram Group, acting as director of gas contracts, as well as the founder of Clinton Gas Transmission, Inc. He also served as president of the law firm of Hammons & Vaught. Mr. Hammons graduated from Oklahoma Baptist University and holds a Masters in International Relations and Juris Doctorate from Oklahoma University.
Wayne T. Egan is a partner in the law firm of Weir and Foulds and serves in the securities law section of said firm. He holds an L.L.B. from Queen's University and a Bachelor of Commerce from the University of Toronto, and is a member of the Canadian Bar Association. Weir and Foulds serves as the Company's Canadian Securities Counsel.
Anne L. Holland is a co-founder, and, since 1982, President of Mayco Petroleum Company. Mayco Petroleum is a crude oil purchasing and marketing company and the exclusive marketing arm of the Great Western Drilling of Ft. Worth. Anne Holland has been associated with the oil and gas industry for over 20 years, and with the crude marketing, drilling and exploration business.
#5: ACCUMULATION IS GOING ON BIGTIME:
Over 10 Million shares purchased vs. less than 1 million the week before.
WEEK OF FEB 14 - FEB 18, 2000
S=Shares Bought by Investors* 10,403,747
B=Shares Sold by Investors* 7,311,075
Difference between shares bought and sold 3,092,672
# of Investors Selling Executions 545
# of Investors Buying Executions 1158
Average Order Buy Size 8,984
Average Order Sell Size 13,415
* Remember this report shows Buys (B) and Sells (S)
from the Market Makers perspective.
Share price open on Feb 14 0.16
Share price close on Feb 18 0.24
Weekly High/Low: .35/.16
WEEK OF FEB 7 - FEB 11, 2000
S=Shares Bought by Investors* 967,675
B=Shares Sold by Investors* 688,825
Difference between shares bought and sold 278,850
# of Investors Selling Executions 44
# of Investors Buying Executions 78
Average Order Buy Size 12,406
Average Order Sell Size 15,655
* Remember this report shows Buys (B) and Sells (S)
from the Market Makers perspective.
Share price open on Feb 7 0.13
Share price close on Feb 11 0.135
CONCLUSION: Remarkable turnaround in first 2 quarters since new and highly experienced CEO, Jack Wheeler, and others, took over the Company last Fall; many new producing properties should continue to dramatically bolster performance. This rejuvenated company, in the first 2 quarters of FY2000 has already done 50% more revenue than ALL 4 quarters of last Fiscal year.
DISCLAIMER: The information contained herein is taken from various sources, or is my opinion. I offer no guarantees of appreciation or price targets. I am not a licensed broker or analyst and am not compensated in any way for this report. I do hold stock in the company. Please do your own due diligence (DD) and make your own decisions to buy or sell. |
