Why TransGlobe Energy's Shares Tumbled
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of oil producer TransGlobe Energy (NAS: TGA) fell 10% in trading today after the company released first-quarter earnings.
So what: Average production rose 49% from a year ago to 16,720 Bpd, and oil revenue grew 63% to $159.4 million. Net earnings nearly tripled to $11.0 million, or $0.15 per share. The strong growth was a positive, but both revenue and earnings fell well short of analyst estimates.
Now what: Results may have missed the mark today, but production is steadily increasing and the stock is beginning to look like a value. Shares trade at just 11 times trailing earnings and 6.7 times forward estimates. I think this is a nice discount for investors and that shares will rebound from the low we're seeing right now.
Interested in more info on TransGlobe Energy? Add it to your watchlist byclicking here.
At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.