Q: hi folks, opinion & guidance on Surge Energy.....would U rate Buy/Hold/Sell....thanks for great service, jb
5i Research Answer:
SGY just reported operational and financial results that were largely in line with expectations. The balance sheet is a bit leveraged but hardly by a problematic amount, barely 1X cash flow. The stock is very cheap on valuation. Payout ratio is minimal ($276M cash flow and only $17M in dividends). While there is small company and cyclical sector risk here, we would be comfortable buying it.