Stock on Watch: QEP Resources, Inc. (QEP)

Company Profile:

QEP Resources, Inc., through its subsidiaries, operates as a natural gas and crude oil exploration and production company in the United States. The company conducts exploration and production activities in the Pinedale Anticline in western Wyoming; the Williston Basin in North Dakota; the Uinta Basin in eastern Utah; the Permian Basin in western Texas; the Haynesville/Cotton Valley in northwestern Louisiana; and other proven properties in Wyoming, Utah, and Colorado. As of December 31, 2015, it had estimated proved reserves of 3,620.2 billion cubic feet of natural gas equivalents. The company sells its gas, oil, and natural gas liquids (NGL) to various customers, including gas-marketing firms, industrial users, local-distribution companies, crude oil refiners, and remarketers, as well as markets affiliate and third-party gas, oil, and NGL volumes. In addition, it operates a gas gathering system and an underground gas storage facility. QEP Resources, Inc. is headquartered in Denver, Colorado.

Recent News:

On Feb. 29, 2016, QEP Resources, Inc. announced that it has priced an upsized underwritten public offering of 33,000,000 shares of its common stock at a price to the public of $10.00 per share.

The Company reported a net loss of $38.6 million for the fourth quarter 2015, or $0.22 per diluted share, compared with net income of $665.9 million, or $3.72 per diluted share, in the fourth quarter 2014.

For the year ended December 31, 2015, QEP reported a net loss of $149.4 million, or $0.85 per diluted share, compared with net income of $784.4 million, or $4.36 per diluted share, for the comparable 2014 period.

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:

QEP’s strengths can be seen in its strong growth, better profitability and better solvency compared with its peers. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator. RSI is increasing to 51.11. The current P/BV ratio indicates it is undervalued compared to the average P/BV ratio of the industry and the sector. We rate QEP Resources, Inc. (QEP) a Strong BUY.