4. Evolution Petroleum Corporation (NYSE:EPM)
Market Cap as of October 13: $262 Million
Number of Hedge Fund Holders: 13
Evolution Petroleum Corporation (NYSE:EPM) operates as an energy company and is involved in the production and exploration of onshore oil and gas properties. Wall Street is bullish on Evolution Petroleum Corporation (NYSE:EPM). This July, Northland analyst Donovan Schafer took coverage of Evolution Petroleum Corporation (NYSE:EPM) with an Outperform rating and an $8.60 price target.
On September 13, Evolution Petroleum Corporation (NYSE:EPM) announced market-beating earnings for the fiscal fourth quarter of 2022. The company reported earnings per share of $0.44 and beat Wall Street consensus by $0.03. The company generated a revenue of $42 million, up 206.65% year over year, and outperformed expectations by $3.88 million. As of October 13, the stock has surged 47% year to date. Evolution Petroleum Corporation (NYSE:EPM) is one of the best micro-cap stocks to buy now.
At the close of Q2 2022, 13 hedge funds were long Evolution Petroleum Corporation (NYSE:EPM) and held stakes worth $18.6 million in the company. As of June 30, Renaissance Technologies is the top shareholder in Evolution Petroleum Corporation (NYSE:EPM) and has stakes worth $11.24 million in the company.
Here is what Steel City Capital had to say about Evolution Petroleum Corporation (NYSE:EPM) in its first-quarter 2022 investor letter:
“Evolution Petroleum Corporation (NYSE: EPM): EPM is a small oil & gas company that owns a portfolio of diversified oil, natural gas, and NGL producing properties. EPM is atypical in the sense that it specifically focuses on non-operating working & revenue interests of producing assets that are in the twilight years of their lives. These assets require fairly minimal capital and have steady, predictable production profiles. Historically, EPM was a less attractive single-asset business, owning only a 23.9%/26.2% working/revenue interest in Denbury’s Delhi field, which is predominantly an oil asset. In recent years, however, management has meaningfully diversified, adding a total of four additional production assets to its portfolio. Pro-forma for its most recent acquisitions, EPM’s production mix is 43% oil, 40% natural gas, and 17% NGL. One of the more important factors that attracted me to EPM was management’s philosophy to operate an unhedged book1 . I subscribe to the school of thought that 1) years of underinvestment in upstream projects has resulted in a structural supply deficit that should be supportive of pricing for some time and 2) commodity exposure is an important hedge against rising inflation. Shares trade at an EV/EBITDA multiple in the mid-2x range and offer a mid-single-digit dividend yield.”
