A focus on opportunistic stocks: Delek US Holdings Inc. (DK), Ring Energy Inc. (REI)

Delek US Holdings Inc. (NYSE: DK) shares are -48.17% down in the year-to-date (YTD) period and have moved 5.78% or $0.95 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +123.11% lower. Comparatively, the stock is -49.30% down YTD and -11.51% over the trailing 3-month period. If we look at the shorter duration, its week performance is 10.91% and -0.86% over the month.

Analyst Recommendations

On July 09, 2020, Tudor Pickering recommended the DK stock is a Hold, while earlier, Scotiabank had Downgrade the stock as a Sector Underperform on August 06, 2020. 17 analysts offering the recommendations for the stock have a consensus rating of 2.90 to suggest that the DK stock is a “Moderate Buy. 2 of the 17 analysts rate the stock as a “Sell”, while 1 has rated it as “Underweight”. 2 recommend buying, with 2 rating it as an Overweight.

The stock currently trades at $17.38 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $19.75. The forecasts give the Delek US Holdings Inc. stock a price target range of $30.00 on the higher side while at least one analyst think the stock could plunge to a low of $14.00. The two limits represent an upside potential of 42.07% or -24.14%.

Earnings Forecast

Analysts estimate the earnings to decrease -194.10% in the current quarter to -$0.59, down from the $0.78 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$3.05, down -33.60% from $3.3 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$1.42 and $0.57. Wall Street estimates earnings per share to be at an average of -$0.01 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 21 over the last 12 months, while SEC filings reveal that there have been 25 insider sales over the same period. Insiders have purchases 1,662,469 shares while those sold by company executives and officers stand at 140,515. The last 3 months have seen insiders trade a total of 48,719 and 7,236 in purchases and sales respectively.

ICAHN CARL C, a 10% Owner at the company, bought 839,400 shares worth $8.75 million at $10.42 per share on Mar 18. The 10% Owner had earlier bought another 270,000 DK shares valued at $3.08 million on Mar 19. The shares were bought at $11.39 per share. Delek US Holdings, Inc. (10% Owner) bought 451,822 shares at $11.02 per share on Mar 11 for a total of $4.98 million while Yemin Ezra Uzi, (Chairman / President / CEO) bought 27,500 shares on Nov 15 for $0.99 million with each share fetching $35.85.

Ring Energy Inc. (AMEX:REI), on the other hand, is trading around $0.80 with a market cap of $54.50M and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $1.27 and spell out a more modest performance – a 37.01% return. Some analysts are even forecasting $0.23 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Ring Energy Inc. (REI) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

REI’s operating margin was negative on the trailing 12 months basis, remaining steady at -75.00%. With this in place, we can see that the company’s diluted EPS declined -$1.99 on the year-over-year period, growing to $0.17 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $847.21 million from $1.01 billion over the previous quarter. The cash flow from operating activities totaled $30.19 million, significantly lower than the $35.41 million reported in the year-ago quarter. The company’s free cash flow for the quarter was $29.17 million.

Insider activity

Insiders have transacted a total of 0 times at Ring Energy Inc. over the last 6 months, with insider purchases undertaken 0 times and accounting for 0 shares. Insider sales totaled 0 shares over the same period, with these deals completed in 0 transactions. Looking at these numbers, we realize that net purchases over that period are 0.0 shares. Insiders now hold a total of 12.08M shares after the latest sales, with 0.00% net shares purchased.

Major holders

Insiders own 17.77% of the company shares, while shares held by institutions stand at 46.10% with a share float percentage of 49.95M. Investors are also buoyed by the number of investors in a company, with Ring Energy Inc. having a total of 159 institutions that hold shares in the company. The top two institutional holders are Blackrock Inc. with over 6.11 million shares worth more than $7.09 million. As of Jun 29, 2020, Blackrock Inc. held 8.99% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 3.99 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $4.63 million and represent 5.87% of shares outstanding.