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2 Possible Small Cap Gems To Consider As 2015 Approaches - $EXK $AXAS

By Bret Jensen

. . . The next selection is an old friend and a small exploration & production company named Abraxas Petroleum (NASDAQ:AXAS). I purchased andwrote about this energy play in July of 2013 when it sold at $2 a share. I rode it up to $6 a share earlier this year before cashing out. After it sold off over 15% during the summer I got back in late August - which turned out to be a bit too early as oil prices continued to decline. . . .

However, the recent plunge in oil prices is liable to be temporary as most OPEC nations need much higher prices to meet their government budgets and I expect some sort of production cut from this cartel over the next several months. . . .

Abraxas has a market capitalization of approximately $450 million and producing assets in the Bakken, Permian and Eagle Ford Basins. Despite the recent fall in oil prices the company is tracking to more than triple earnings this year over 2013′s levels. Another 20% to 25% gain in 2015 currently is called for by the consensus.

The vast majority of Abraxas’ production comes from oil. The production growth over the past few years has reduced the company’s leverage dramatically and the shares are cheap at approximately eight times next year’s projected earnings; about half the overall market multiple.

Read the full article here.

AXAS Abraxas Petroleum Corp

About Bret Jensen

Daily columnist for RealMoney. Chief Investment Strategist (CIS) for S.A.M (Simplified Asset Management), a long/short hedge fund based in Miami, Florida from 2008 to 2011. Fund was in top five percent of long/short hedge funds for total return in its first
full year(2009) ranked by Hedgeco fund database(over 450 funds in category). 

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