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EnvestorFirst (< 20)

Don’t Walk On The Range, RUN, Away As Fast As You Can. ( $RRC $CHK $BHP $DVN $SWN $CLR )



August 20, 2012 – Comments (0) | RELATED TICKERS: RRC

Several of our articles recently have touched on the major problems natural gas producers are having and how they are impacting their financial statements. You see majors like $BHP writing off major natural gas plays and other stables like $CHK cutting back the majority of their exploration budgets. When the economics don’t make sense you do what you do. While we will contend that $RRC is a great overall company, you also have to be realistic when something is overvalued, and I mean overvalued.

 Range Resources Corporation (RRC) is a United States-focused natural gas company which recently traded at astronomical price-to-earnings multiples over 200. It is an awesome company whose earnings cumulative average growth rate is expected to top 20%. Unfortunately, even this prodigious growth just doesn’t justify its valuation multiples. When compared to its peers, it is readily apparent that investors should stay away from RRC shares at current price levels, even after considering growth projections.


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