Denbury Resources Inc. (DNR) Has Many Growth Opportunities

Matthews James S. sold 20,000 shares in Denbury Resources Inc. (NYSE:DNR) for $459,949 in transaction occurred on 2018/08/23. After making this transaction, the EVP, CAO, GC & Sec’y owns a direct stake of 97,200 shares, worth $998,089, as per the last closing price. On 2018/06/05 Mcmichael Greg, Director at DNR, dumped 40,000 shares at an average price of $4.25 per share. The selling total is valued at $331,266.

Separately, it had been reported that some other DNR insiders also took part of the insider trading activity. Director, Sugg Laura A had divested 12,500 shares for $115,841 through a trade on 2018/05/07. Following this activity, the insider holds 44,375 shares worth $251,375 as of recent close. Wall Street’s most bullish Denbury Resources Inc. (NYSE:DNR) analysts are predicting the share price to blow past $4.6 per share during the next 12 months. The current median share price forecast by them is $2.75, suggesting that the stock could increase 26.73% in that time frame. The average price target of $2.98 calls for a nearly 37.33% increase in the stock price.

Denbury Resources Inc. (DNR) trading activity significantly weakened as the volume at ready counter decreased to 10,367,447 shares versus 15,305,545 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 15,186,275 shares. The share price dropped -5.24% in recent trade and currently has a stock-market value of $1.05B. The shares finished at $2.17, after trading as low as $2.14 earlier in the session. It hit an intraday high Friday at $2.27. The stock is now 56.12% above against its bear-market low of $1.39 on December 26, 2018. It has retreated -211.06% since it’s 52-week high of $6.75 reached in October. Now the market price is down -3.56% on the year and up 26.9% YTD.

DNR’s 50 day simple moving average (SMA 50) price is $2.35 and its 200-day simple moving average (SMA 200) price is $3.97. The company’s stock currently has a total float of 455.72M shares. Its weekly volatility is hovering around 6.84% and felt 10.41% volatility in price over a month. On the upside, the share price will test short term resistance at around $2.25. On a downside, the stock is likely to find some support, which begins at $2.12. The failure to get near-term support could push it to $2.06.

It had seen a negative analyst call from CapitalOne, which downgraded the stock from Overweight to Underweight on December 20. Analysts at Stephens, started covering the stock on December 06 with a Equal-Weight rating. Brokerage firm Imperial Capital, looks cautious as they stick to prior recommendation of Outperform, in a call on October 30. However, they did change the target price from $6 to $4.

When looking at valuations, Denbury Resources Inc. (DNR) has a cheap P/E of 6.98x as compared to industry average of 14.33x. Moreover, it trades for 3.21 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.02x price/book and 0.72x price/sales. Compared to others, Denbury Resources Inc. is in a different league with regards to profitability, having net margins of 18.8%. To put some perspective around this, the industry’s average net margin is 17.85%. DNR’s ROE is 34.5%, which is also considerably better than the industry’s ROE of 18.52%. It’s also not liquid in the near term, with a current ratio of 0.5. The stock has a debt/capital of 2.93.

Shares of Denbury Resources Inc. (DNR) have dropped -32.6% since the company’s Mar-19 earnings report. Over the past 12 fiscal quarters, Denbury Resources Inc. (NYSE:DNR) has topped consensus earnings estimates in 9 quarters (75%), missed earnings in 2 quarters (16%), whereas at 1 occasion EPS met analyst expectations. DNR last reported earnings on November 08, 2018 when it released Sep-18 results that exceeded expectations. The company raked in $0.13 per share, -99.05% change on the same period last year. That was better than consensus for $0.11. Revenue for the recent quarter stood at $394.97 million, up 48% on last year and above the $349.85 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $379.39 million to $472.05 million, which should be compared with $317 million generated last year. EPS is seen in a range of $0.18 to $0.2, against the $0.11 reported a year ago.