GMX Resources, Inc. (GMXR)

No one has benefited more from $100+ oil than the smaller players on the stock market. We have seen one company after another crush earnings, and that is even with large hedging losses as a just in case the price were to come down. Today Goldman Sacs came out with information that oil is going to $200. I have said over and over again that I thought we were going to miss a recession by a hair. We still may, but if oil continues to head upward to that area we will see a recession. I know, everyone is going to say that we are already in a recession, but it takes six months to figure out when a recession starts and ends, and the last I checked the only people able to decide that are the ones with the job. The biggest worry is that Goldman made the call on $100 oil, so let's hope they don't make a habit of being right with respect to this price.

Oil and gas really pushed the revenues and earnings up for GMXR. Their... More No one has benefited more from $100+ oil than the smaller players on the stock market. We have seen one company after another crush earnings, and that is even with large hedging losses as a just in case the price were to come down. Today Goldman Sacs came out with information that oil is going to $200. I have said over and over again that I thought we were going to miss a recession by a hair. We still may, but if oil continues to head upward to that area we will see a recession. I know, everyone is going to say that we are already in a recession, but it takes six months to figure out when a recession starts and ends, and the last I checked the only people able to decide that are the ones with the job. The biggest worry is that Goldman made the call on $100 oil, so let's hope they don't make a habit of being right with respect to this price.

Oil and gas really pushed the revenues and earnings up for GMXR. Their first quarter earnings were spectacular. They beat earnings estimates by 25%. They beat revenue estimates by 14%. The highest analyst estimate was beaten by 14% with respect to earnings. Production was up 60% year over year. Sales more than doubled. EPS was up 90% year over year. This company not only has realized the increase in oil and gas prices but is also increasing production. They have realized production growth for 16 straight quarters. They will add one more leased rig this year and a second in 2009 to continue this.

GMXR has benefited from increased prices that have allowed them to utilize some of their horizontal wells. Some of the shales have massive reserves and now it is profitable to tap them. The company is well managed, as you can see by their return as $100 would almost give you $2000 today. Since 2003 reserve growth has also been spectacular as the replace current production with growth down the road. 2003 had a reserve of 53 Bcfe and today that stands at 1970 Bcfe. Last year they also had the best operational performance of any company in their class, plus they were second with respect to their entire industry. They are also number one in their sector with respect to reserve replacement. Their total operating costs were 3rd behind UPL and SWN.

This company continues to beat their competition in many areas, and has just kept flying under the radar. Going forward they are going to grow production and reduce costs. They will continue to hedge (which they have done a very good job of) to lower commodity fluctuations. Use increased production to fuel capital expenditures.

Looking over their current estimates, the analysts are all over the board as full year is anywhere from $1.03 to $1.72. I believe they are going to come in at around a $1.70 for the full year. Mostly on their increased production and that I believe oil will have a pretty tough bottom at $100. This number places current PE at 24 through December. Since they currently have a one year PEG of .67, we see $1.70 would be 2008 earnings growth of 85%, and that would equate to a PE ratio of approximately 57. That puts a 96 dollar price target for the end of the year, but if you use the current PE the stock would still grow to $74. The chart is experiencing a major breakout, now and will not see resistance until $48. If you buy now get out at $47 and see if they stock pulls back a little as it has had quite a run.

GMX is a small natural gas company with holdings in East Texas overlying the Haynesville shale. Current production is from overlying Cotton Valley sands, so Haynesville is just now being developed. Small size of company means successful development of Haynesville gives hugh upside. However, Haynesville in East Texas has been less productive than in LA, and GMX lacks financial resources to fully fund development. Looks like high risk/very high reward play. Continued low NG prices will be very detrimental.

Another VERY attractive takeover candidate in my view. Whole father and son operation is in west texas and they have grown this operation from nothing to a very attractive potential asset. They could easily be folded into another close by neighbors operation.

As oil continues to climb and the dollar continues to plummet, this stock will benefit.

omg im stealing this.

gas wont stay cheap for ever but we will be moving to new ways to fuel our county so stay long i bought in at 6.91

GMXR is an exploration company in the right area for huge potential. Lets see if they hit

It has hit the bottom....no where to go but up from here. Good company.

Low cost natural gas producer

Natural Gas is bottoming

esv

Another stock that should outperform once the price of NG turns around.

ng

GMXR's net asset value is much greater than its market cap. It also has underperformed its peer. This could be a good ketchup stock. Raising my price target to $18 by year's end.

This account tracks the performance of the investment firm Ruane, Cunniff, and Goldfarb - the investment manager of Sequoia Fund.

Pick on a dip

Mmm...oil...

due for an uptick

GMX is in a good position. Although their P/E is high due to acquisitions, they are business minded and during tight times will be one of the first to do layoffs. They are located in Oklahoma City, which gives them acces to the #2 talent pool for Geologists in the country if they start hiring back again.