Northern Oil And Gas (NOG) Could Be 25% Undervalued After Weak Third Quarter Results

Northern Oil and Gas (NOG) is back in focus after third quarter results showed revenue of US$345.91 million and a net loss of US$111.81 million, along with a reaffirmed quarterly dividend.

The share price reaction has been choppy. Northern Oil and Gas is trading at US$22.84 after a 3.16% 1-day share price gain that follows a 19.44% 7-day decline and a 5.54% drop over 30 days. The 1-year total shareholder return of 14.36% contrasts with a weaker 3-year record and indicates that momentum has recently started to fade.

Compare Northern Oil and Gas to peer opportunities by scanning 41 high quality undervalued stocks, which combine balance sheet strength with cash flow support behind their current share prices.

After a sharp pullback despite a reaffirmed dividend and ongoing losses, the key issue for Northern Oil and Gas now is simple: Does the current valuation still compensate you for the earnings risk on the table?

Most Popular Narrative: 25% Undervalued

The most followed narrative puts Northern Oil and Gas at a fair value of about $30.44 per share compared with the latest close at $22.84. This puts the current debate squarely on whether that gap reflects risk or mispricing.

The shift toward gas weighted assets with integrated midstream in Appalachia and Utica, combined with the new Duvernay position that is expected to add years of lower breakeven light oil inventory, sets up a longer runway for volumes at competitive costs that can support margins and future earnings.

See why 16 investors see Northern Oil and Gas as 25% undervalued.

Result: Fair Value of $30.44 (UNDERVALUED)

Still, higher interest costs on Northern Oil and Gas debt and the risk of further non cash impairments or hedge losses could quickly challenge that undervalued narrative.

Find out about the key risks to this Northern Oil and Gas narrative.

Next Steps

If the mixed signals around Northern Oil and Gas have you on the fence, act while sentiment is still resetting and build your own view using the 4 key rewards and 2 important warning signs.

Ready For More Ideas Beyond Northern Oil and Gas?

If you only stop at Northern Oil and Gas, you risk missing other opportunities that fit your goals just as well, or even better.

• Target resilience by reviewing companies with stronger balance sheets and fundamentals through the list of solid balance sheet and fundamentals (24 results).
• Hunt for mispriced quality and see which businesses currently screen as 41 high quality undervalued stocks.
• Spot potential future leaders early by scanning the 20 high quality undiscovered gems before they are widely followed.

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