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 (Nasdaq: 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 by clicking here.

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.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1881200, ~/Articles/ArticleHandler.aspx, 4/19/2014 3:00:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement