Newspaper article THE JOURNAL RECORD

Analyst Foresees Sharp Revenue, Profit Increases in Future of Panhandle Royalty of Oklahoma City

Newspaper article THE JOURNAL RECORD

Analyst Foresees Sharp Revenue, Profit Increases in Future of Panhandle Royalty of Oklahoma City

Article excerpt

An independent investment research firm has issued a report predicting a sharp increase in earnings and revenues over the next three years for Panhandle Royalty of Oklahoma City.

Dutton Associates, based in El Dorado Hills, Calif., said it expects Panhandle's earnings to increase to $11.18 million for the fiscal year ending Sept. 30, 2007, from $6.7 million for the fiscal year ended Sept. 30, 2004. The report projects earnings for Panhandle will total $7 million for the current fiscal year and $8.5 million for the fiscal year ending Sept. 30, 2006.

Net income for the first six months of the current fiscal year ended March 30 totaled $4 million.

Revenues over the three years are expected to increase to $33 million for the fiscal year ending Sept. 30, 2007, from $23.7 million for the fiscal year ended Sept. 30, 2004.

Panhandle reported revenues for the first six months of the current fiscal year of $14.8 million.

It's a great time to be in the business, said H.W. Peace II, Panhandle's president and CEO. We are growing because the cost of oil and gas is going up.

The 16-page report was prepared by Less Childress, a Dutton senior analyst.

Dutton said it is maintaining a strong buy rating for Panhandle and an adjusted 12-month price target of $33.

In American Stock Exchange trading Monday, Panhandle closed up 30 cents at $26.53.

We believe Panhandle Royalty Co. is undervalued based on our assessment of its low-risk profile, current and future prospects, Childress said in the report.

Panhandle's market capitalization totals $111.5 million. The 52- week high is $31.68 and the low is $14.75.

Dutton Associates has 27 analysts and provides continuing analyst coverage of more than 95 enrolled companies.

Panhandle's structure as a mineral and royalty interest oil and gas company, and the 'spread' of its holdings throughout Oklahoma - a state with distinct cost and operating advantages for the smaller oil and gas companies - make it more profitable on a margin basis than the average independent U. …

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