Why Gulfport Energy Shares Plunged

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 and gas company Gulfport Energy (NAS: GPOR) fell as much as 15% in trading today after the company reported earnings.

So what: Gulfport reported that production increased 24% from last year to 7,089 barrels of oil equivalent per day and net income rose 27% to $26.7 million, or $0.48 per share. But analysts and investors thought the company would generate $0.60 per share in earnings, so the company didn't live up to expectations this quarter.

Now what: Management expects production to increase to an average of 7,923-8,470 barrels of oil equivalent per day for the full year, which is expected to bring a steady rise in earnings. Even after this quarterly miss, Gulfport has been a fairly steady producer and trades at just 8.2 times 2012 earnings estimates. I think this gives investors a nice discount and shares will improve from here as production increases.

Interested in more info on Gulfport Energy? Add it to your watchlist byclicking here.

At the time thisarticle 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.Motley Fool newsletter services have recommended buying shares of Gulfport Energy. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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