Why Quicksilver's Shares Popped

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 Quicksilver Resources (NYSE: KWK  ) jumped 15% today after reporting third-quarter earnings.

So what: Revenue fell from $169 million a year ago to $113 million, but that's due in large part to asset sales. What's more impressive is a swing to a third-quarter profit of $11 million, or $0.06 per share, after coming close to bankruptcy over the past couple of years.  

Now what: Management is executing on a deleveraging plan and even announced a deal with Eni today that would pay up to $52 million for a 50% stake in Quicksilver's Leon Valley acreage. This and more has helped the company reduce net debt over the past year, although I'm still concerned about $1.93 billion in long-term debt hanging over the company. That risk alone will keep me out of the stock, but if conditions continue to improve, there's certainly a lot of upside for investors.

3 buys for the energy boom
Quicksilver is a highly leveraged energy play, but there are a few less risky bets out there. The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 


Read/Post Comments (0) | Recommend This Article (2)

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: 2713961, ~/Articles/ArticleHandler.aspx, 7/24/2014 12:25:00 PM

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