Devon Energy Corp. (DVN) Social Stream
Featured Post From StockTwits About DVN
$DVN for all DVN fans free update frm my paid newsletter fwiw:justAtool, published August 12, 2021
Devon Energy (DVN) got hit before and right after its Q2 report, but a bounce in oil prices, a rotation back into some cyclical stocks and a realization of the gigantic cash flow potential has brought in some buyers. In fact, we think it’s less about the possible upside (which is gigantic if oil prices ramp) and more about the still-solid figures when stress-testing a decline in energy prices. For instance, even with realized oil prices of just $50 and natural gas prices of $2.20 in Q2 (both including huge hedging losses), the firm cranked out around 87 cents/share free cash flow (12% annual FCF yield!). Thus, as hedges roll off, DVN should see a similar level of cash flow even if prices decline back down to that level, which is 25% below the current price of oil and 45% for gas! Testing the 50-day line from below, though they have lifted decently off support. We’re encouraged and optimistic that the correction is over.
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