Stifel Nicolaus Maintains Hold on SandRidge Energy
Stifel Nicolaus reiterates its Hold rating on SandRidge Energy (NYSE: SD) as the company announces new joint venture.
Stifel Nicolaus says, "While yesterday's JV announcement by SD is positive in closing 23% of the coming three year funding gap, given the volatility in crude oil and the meaningful leverage/cash flow outspend that still exists along with the production risk posed by infrastructure constraints in the Permian, we maintain our Hold rating on the stock. The name continues to have one of the largest discounts to its underlying asset value and makes sense for investors who are bullish on crude oil (reduces funding risk issues) and can stomach the higher volatility as the company works toward decreasing its funding gap over the coming few years and proving up its resource base."
SD closed at $8.21 per share on Thursday.
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