Stock on Focus: Gastar Exploration Inc. (GST)

Company Profile:

Gastar Exploration Inc., an independent energy company, engages in the exploration, development, and production of oil, condensate, natural gas, and natural gas liquids in the United States. Its principal activities include the identification, acquisition, exploration, and development of oil and natural gas properties on unconventional reserves, such as shale resource plays. The company is also developing the primarily oil-bearing reservoirs of the Hunton Limestone horizontal oil play in Oklahoma; and liquids-rich natural gas in the Marcellus Shale in West Virginia. The company was formerly known as Gastar Exploration Ltd. and changed its name to Gastar Exploration Inc. in January 2014. Gastar Exploration Inc. is based in Houston, Texas.

Recent News:

Gastar Exploration Inc. declared monthly cash dividends on its 8.625% Series A Preferred Stock (“Series A Preferred Stock”) and its 10.75% Series B Preferred Stock (“Series B Preferred Stock”) for December 2015.

On Nov. 16, 2015, Gastar Exploration Inc.announced that Mr. Jerry R. Schuyler, a current independent director of Gastar, has been appointed Chairman of Gastar’s Board of Directors, replacing Mr. John M. Selser, Sr. who has resigned from Gastar’s board of directors to devote more time to other business interests.

On Nov. 5, 2015,Gastar Exploration Announced Third Quarter 2015 Results. Third Quarter production increased 39% year-Over-year to 13.6 MBoe/d. Net loss attributable to Gastar’s common stockholders as reported for the third quarter of 2015 was $191.8 million, or a loss of $2.47 per share.

 
 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

GST’s strengths can be seen in its better growth, strong profitability and better solvency. Its revenue and net income have increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator. RSI is increasing to 43.15, which is in bull territory. The current P/CF ratio indicates it is undervalued compared to the average P/CF ratio of the industry and the sector. We rate Gastar Exploration Inc. (GST) a Strong BUY.

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