Halcon Resources Corporation (NYSE:HK)

CAPS Rating: 3 out of 5

An independent oil and natural gas company engaged in the acquisition, development, exploitation, exploration and production of oil and natural gas properties, in Texas, Louisiana and Oklahoma.


Player Avatar TSIF (99.96) Submitted: 4/7/2010 4:46:27 PM : Underperform Start Price: $5.22 HK Score: +4.04

RAM Energy Resources is a five star CAPS play in the oil and natural gas industry. It has spiked 23% the last five days as oil creeps higher, but on virtually no other news.

My downthumb:

1. For starters, DragonLZ asked me to stop agreeing with him. He seems to think it's bad karma for him, although most of the equities I agree with him with, besides a brief setback are well up from when I joined him in the calls. So here goes one against him to make him feel better.

2. RAM operatates in several areas of the country. Production is down in one area, but up in another. New drilling and capex seem to be minimum and not offsetting the draw down on operating well. RAM was profitable when oil was $140 per barrel, might be again at $140 a barrel, but doesn't seem to be excessively profitable at $80 per barrel. Since I went BEAR on oil on three ETF's yesterday, you might gather what I think about oil's chances of hitting $140 a barrel.

3. RAM Energy has NO cash left in the bank. Of course many companies operate off of revolvers, but with interest already pushing $5 Million per quarter on $246 Million of debt, accouts payable double accounts receivable, four straight losing quarters, and a book value of NEGATIVE 0.01 per share, it's hard to see where RAM Energy can bank on borrowing.

RAM Energies is a favorite here on CAPS. I'm not seeing the flow. Downthumbing sub-$2 equities is really not worth the risk, but in this case, I can't resist an equity trading 20% higher in a week that was already 50% overpriced.

Report this Post 12 Replies
Member Avatar dragonLZ (99.38) Submitted: 4/25/2010 12:51:31 PM
Recs: 1

I will never understand this call.
Downthumbing it at $2.50 (where it was a few months ago) might make some sense, but downthumbing it now, when it just
started going up again, will never make sense to me.

Still, I have to thank you for not agreeing with me... :)

Member Avatar LifeForceDance (57.15) Submitted: 4/30/2010 9:38:43 AM
Recs: 0

The trading chart looks good. So much for funnymentals.

Member Avatar TSIF (99.96) Submitted: 4/30/2010 8:10:24 PM
Recs: 1

You lost me here lifeforcedance, if you like charts more than fundamentals, then that's your call, I can respect that. But you don't have any data to prove that there is anything wrong with my fundamentals. I made a five year call. Check back in 9-12 months and lets talk. Until then, take your 43% accuracy and lets see how your technicals do over the long haul.. Assuming you know what technicals even are. I'm willing to admit when I'm wrong, and I might on this call as I have many others over the years. None of us are prefect, but your funnymentals vs. technicals call has no meat to it to digest, besides wishful thinking. Come back when you have something interesting to say. I welcome meaningful dialogue which is why I make these "pitches" in an open forum. Good luck.

Member Avatar goldminingXpert (29.47) Submitted: 6/15/2010 11:26:15 AM
Recs: 0

I'm in the green thumb camp on RAME. And I use greens sparingly.

Member Avatar TSIF (99.96) Submitted: 6/15/2010 2:16:31 PM
Recs: 0

I had closed this awhile ago, but CAPs left my pitch up for lack of anyone else in the red thumb pitch camp, but I'm back in with a red thumb after today's hoopla. Debt, lowered production guidance, (which was minimal anyway)....shopping itself out.....

Member Avatar TSIF (99.96) Submitted: 6/15/2010 2:18:58 PM
Recs: 0

Changed my mind....no downthumbs from me until the reindexing on the Russell on 6/25 is over and that pop decays. Good luck.

Member Avatar srkenne264 (99.56) Submitted: 11/22/2010 10:43:23 AM
Recs: 0

I think the original statement was a good call. I believe that many of the smaller E&P companies are going to find 2010 a very difficult year, espcially if they are not drilling...

I'm ending my pick today.

Member Avatar TSIF (99.96) Submitted: 11/22/2010 7:02:36 PM
Recs: 0

I don't see enough up or downside on this one either way. I closed this one at least six months ago. I almost played it down again after the reindexing, but Dragon scared me out of it. Risk/reward doesn't merit calling it down, but I still think it's most likely a dud. I'll find another downthumb to rec so my opinions fade away.......

Member Avatar KimLanners (< 20) Submitted: 5/4/2011 1:57:52 PM
Recs: 0

hey man oil on the way to 140$, guess who is wrong?
You say rame war profitable at 140$ a barrel! Im really wondering how did you get your foolish points :)

Member Avatar TSIF (99.96) Submitted: 5/4/2011 5:12:59 PM
Recs: 0

Made the pitch and comments over a year ago. Long since closed it. Not $140 yet a year later. Over a long enough period of time world events, a crisis, or speculation could most certainly put it there again, but I think it would drift there with plenty of warning, moaning and groaning. Even if it does, RAME wouldn't be one of my plays. Unlike RAME, most major oil company's have trounced the S&P over the last year.

If I'd left the call open, I'd be even more ahead since the S&P is up 15% more than RAME.

Member Avatar Mega (99.96) Submitted: 1/24/2012 5:58:37 PM
Recs: 0

Time to red thumb again TSIF? I think so.

Member Avatar TSIF (99.96) Submitted: 1/25/2012 6:49:56 PM
Recs: 0

Wow, I stopped paying attention to this one. I think I've been sleeping! Wish I'd been watching it the last few weeks and timed the $4.00 obvious peak. I'll have to take a fresh look and see where the downthumb risk/reward is, but a quick look would suggest that yes, it's time again! Thanks for calling it out!

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