ATP Oil & Gas Corp (ATPG)

I wrote blog on top oil and gas picks in May 2009 titled “Tomorrow's Exxon Mobils” available at http://caps.fool.com/Blogs/ViewPost.aspx?source=isesitlnk0000001&bpid=189090, people were mocking on that post....giving all reasons not to invest in ATPG. ATPG has almost quadrupled in this time. I should say all those guys missed sweet rides. Recent market correction has brought opportunity to increase holdings in these stocks. Again my recommendations…. don’t miss this opportunity. Let’s see what has changed for this company in last six months after I wrote that blog.

First ATPG.....three great news for ATPG

1) Discovered approximately 250 net feet of logged hydrocarbon pay in the Gulf of Mexico at its Telemark Hub, an amount that effectively doubles its predrill estimate. Read "5 stocks reaching greatness" by Rich Duprey given at http://www.fool.com/investing/general/2009/09/30/5-stocks-approaching-greatness.aspx?source=itxsitmot0000001.

2) Best Patent Award Winner...news at http://www.fool.com/investing/general/2009/09/30/5-stocks-approaching-greatness.aspx?source=itxsitmot0000001.

3) Finalist for Platts 2009 Best Infrastructure Project Award. Results yet to be declared who knows ATPG can be winner too. For finalist list available here http://www1.platts.com/GEAWeb/resources/jsp/finalists2009.jsp.

Most of the time these awards goes to Top Energy companies worth more than 20 billion market cap. ATPG being a small company, making space in these footholds of larger companies. Sales growth in last five year 52% and earnings growth at 82%. Estimated earnigs growth for next five years 15%. EPS growth for this year 118% and EPS growth for next year 1093%. Estimated EPS for next year $2.

Now some valuation numbers
Forward P/E: 8.36
P/B: 1.89
ROE: 22.31%

Significantly undervalued and providing good returns.

My prediction is this stock will be hovering above $60 in one year and this company will be worth more than 20 billion in five years. Recent market correction has brought this stock from $21.5 to $17. I will take it as opportunity to increase my holdings. This stock has second highest proportion in my portfolio after ACAS.

Outstanding company making correct decisions for future earnings..