I mentioned in the earlier post from this morning that I may have put $3000 into my small cap names which I have discussed since starting this blog back in October. I checked the total and it was a few hundred over 4 thousand dollars. Whatever, since I enjoy investing in these small companies, I have decided to take the total up to $10,000 over the next several months using my cash flow. This may keep me out of trouble and even prove to be worthwhile. So, this effort will consume a lot of time and eat up a good chunk of my excess cash flow. I am running out of companies that are not dependent on a good economy to be successful. So, I am going to broaden my scope, starting today.
Today I bought 50 shares of Gulfport Energy (GPOR) at 4.2. This is a small E & P oil and gas company that has assets along the Louisiana Gulf coast and in the Permian Basin in West Texas. GPOR also has a 25% interest in the Grizzly Oil Sands project in Canada. The company has about 95 million in debt as of 9/30/08. GPOR: Balance Sheet Forward P/E is less than 6 but that will be highly dependent on prices for oil and gas of course for the remainder of 2009. Price to book is .53. The company recently realized a 39 million dollar gain by liquidating its hedges for 2009. The proceeds are earmarked for general corporate purposes which may include paying down its credit facility. For the last quarter, the company had 36.9 million in revenues and a profit of 14.1 million or $.33 a share. As you would expect, hurricanes can be a problem. The company has loaned money to fund the Grizzly Oil Sands project, over 9 million as of 930/09 ( page 10 of recent 10-Q: Form 10-Q) Its credit facility is secured and is up for renewal in 2010 (page 11) I do not have access to any decent reports. The market cap at the current price of 4.2 is around 179 million.
I have no recollection of why I originally put this security on my small cap monitor list. I bought it today because it appears to be viable even after a severe downturn in oil and gas prices. The share price has declined from a high of around 16 in June 2008 to a fairly steady 4 and change over the past few months. There is upside potential with a resumed uptrend in oil and natural gas prices but no one knows when that might happen.
I also initiated a position in SLGPRC by just buying 30 shares in an IRA at 11.89 this morning. If it goes down, I will add it to a Roth conversion later this year. Oddly, and there are a variety of reasons to explain the phenomenon, my retirement accounts are near break even since November 2007. At 11.89, the yield on this cumulative preferred of S L Green is close to 16%. This issue is cumulative with a $25 par value, a 7.625% coupon, and no maturity of course. I have discussed this REIT in several prior posts.
A link to the prospectus for SLGPRC is as follows: www.sec.gov
I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator. I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine. Any discussion made by me of particular securities is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the post. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, and all others by me, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments. Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed. These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities. All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me.