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Also traded in: Germany

GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 4/10

vs
industry
vs
history
Cash to Debt 0.01
EPE's Cash to Debt is ranked lower than
99% of the 448 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 0.43 vs. EPE: 0.01 )
Ranked among companies with meaningful Cash to Debt only.
EPE' s Cash to Debt Range Over the Past 10 Years
Min: 0.01  Med: 0.01 Max: N/A
Current: 0.01
Equity to Asset 0.11
EPE's Equity to Asset is ranked lower than
84% of the 439 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 0.50 vs. EPE: 0.11 )
Ranked among companies with meaningful Equity to Asset only.
EPE' s Equity to Asset Range Over the Past 10 Years
Min: 0.11  Med: 0.35 Max: 0.43
Current: 0.11
0.11
0.43
F-Score: 3
Z-Score: -2.36
M-Score: -6.91
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 5/10

vs
industry
vs
history
Operating margin (%) -207.29
EPE's Operating margin (%) is ranked lower than
73% of the 443 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: -48.82 vs. EPE: -207.29 )
Ranked among companies with meaningful Operating margin (%) only.
EPE' s Operating margin (%) Range Over the Past 10 Years
Min: -207.29  Med: 30.60 Max: 48.41
Current: -207.29
-207.29
48.41
Net-margin (%) -196.44
EPE's Net-margin (%) is ranked lower than
72% of the 443 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: -66.22 vs. EPE: -196.44 )
Ranked among companies with meaningful Net-margin (%) only.
EPE' s Net-margin (%) Range Over the Past 10 Years
Min: -196.44  Med: 19.31 Max: 28.55
Current: -196.44
-196.44
28.55
ROE (%) -105.00
EPE's ROE (%) is ranked lower than
84% of the 463 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: -23.64 vs. EPE: -105.00 )
Ranked among companies with meaningful ROE (%) only.
EPE' s ROE (%) Range Over the Past 10 Years
Min: -150.92  Med: 15.83 Max: 20.07
Current: -105
-150.92
20.07
ROA (%) -40.09
EPE's ROA (%) is ranked lower than
76% of the 503 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: -14.36 vs. EPE: -40.09 )
Ranked among companies with meaningful ROA (%) only.
EPE' s ROA (%) Range Over the Past 10 Years
Min: -46.89  Med: 5.40 Max: 7.89
Current: -40.09
-46.89
7.89
ROC (Joel Greenblatt) (%) -47.47
EPE's ROC (Joel Greenblatt) (%) is ranked lower than
66% of the 487 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: -22.77 vs. EPE: -47.47 )
Ranked among companies with meaningful ROC (Joel Greenblatt) (%) only.
EPE' s ROC (Joel Greenblatt) (%) Range Over the Past 10 Years
Min: -55.08  Med: 5.05 Max: 17.81
Current: -47.47
-55.08
17.81
» EPE's 10-Y Financials

Financials (Next Earnings Date: Est. 2016-07-29)


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q1 2015

EPE Guru Trades in Q1 2015

Jim Simons 106,400 sh (New)
Paul Tudor Jones 20,700 sh (-55.48%)
Steven Cohen 179,800 sh (-88.66%)
» More
Q2 2015

EPE Guru Trades in Q2 2015

Third Avenue Management 328,445 sh (New)
Jim Simons 468,700 sh (+340.51%)
Steven Cohen 444,300 sh (+147.11%)
Paul Tudor Jones 10,300 sh (-50.24%)
» More
Q3 2015

EPE Guru Trades in Q3 2015

Paul Tudor Jones 149,900 sh (+1355.34%)
Jim Simons 1,358,600 sh (+189.87%)
Steven Cohen Sold Out
Third Avenue Management Sold Out
» More
Q4 2015

EPE Guru Trades in Q4 2015

Paul Tudor Jones 82,242 sh (-45.14%)
Jim Simons 444,631 sh (-67.27%)
» More
» Details

Insider Trades

Latest Guru Trades with EPE

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Guru Investment Theses on EP Energy Corp

Third Avenue Management Comments on EP Energy Corp - Sep 25, 2015

As the energy markets churned weaker over the quarter, we continued to look for attractive investment opportunities, as it was our sense that many investors were shooting first and asking questions later on their sales. We continue to believe that the current price weakness is a supply driven shock, and not what we believe would be a more worrisome lack of demand driven sell off.



The one‐two punch of higher Saudi Arabian production and potential future Iranian production have pushed oil down to the low $40 per barrel range, well below what we believe is a realistic industry wide break‐even level in the mid‐$60’s or higher, even with the benefit of recent service cost reductions that are likely not sustainable over time. In the near term we have seen a strong demand response in higher oil use and over the medium term we would expect a drop in production of higher cost barrels, which would reduce supply and lead to higher oil prices.





As we sifted through the sell‐off looking for good companies, we identified EP Energy Corp. (NYSE:EPE) as it has similar characteristics to our investment in Rosetta Resources with high quality acreage in two of the most attractive shale regions in North America in the Eagle Ford and the Permian.





EPE is an independent oil and gas exploration and production company that was previously owned by El Paso Energy. The company was sold in May 2012 to private equity investors Apollo Global Management, Riverstone Holdings, Access Industries and Korea National Oil Corporation (KNOC) for $7.2 billion. EP Energy began trading publicly in January 2014 and the private equity sponsors continue to own 85% of the shares outstanding. EPE operates in four areas: the Eagle Ford Shale in Southern Texas, the Wolfcamp Shale in the Permian Basin in West Texas, the Altamont field in the Uinta Basin in Northeastern Utah and the Haynesville Shale in North Louisiana.





EPE’s management has an excellent track record of growing oil and gas production at a 27% compound annual growth rate over the past five years and proven reserves increased by 14% last year. The company’s Eagle Ford acreage is its most economic area in the current oil and gas price environment with break‐even (a company‐defined 10% return on capital) at an oil price of $40 per barrel. EPE’s Permian Midland Basin acreage holds significant growth potential. The Wolfcamp wells have a 10% return at $44 per barrel oil which is almost as economic as the Eagle Ford acreage as a result of lower costs and improved drilling results. The Permian acreage provides EPE with long term growth opportunities with more than twice the acreage as the Eagle Ford and over 3,000 potential drilling locations. In addition the Wolfcamp is six‐times thicker than the Eagle Ford with at least 6 potential producing zones versus one in the Eagle Ford.





Although EPE has $4.9 billion of debt and a Net Debt to EBITDA ratio of 1.9 times, which is at the high end of our comfort zone, we are very comfortable with the financial strength of the company since none of the debt is due prior to 2018. In addition EP has an enviable hedge position with 95% of 2015 expected oil production hedged at a floor of $88 per barrel and 75% of estimated 2016 oil production hedged at a floor of $80 per barrel which will allow the company to live within cash flow without having to add additional debt. EP’s hedges have a current market value of around $875 million which if monetized could be used to repay debt and bring the Net Debt to EBITDA ratio down to 1.6 times.





We are confident that management’s history of improving drilling results across all of their acreage positions as well as continued cost reductions will support continued earnings improvement despite weak oil and gas prices. We also think that EPE could be an attractive acquisition target for a mid‐sized E&P that wants to enter or add to its position in the very attractive Eagle Ford and Permian plays. In addition EPE may consider divesting its Altamont or Haynesville acreage at the right price.



From Third Avenue Management's third quarter Small-Cap Fund shareholder letter.



Check out Martin Whitman latest stock trades

Top Ranked Articles about EP Energy Corp

Screening Based on Piotroski F-Score The 10-year return is 14.7% compared to Standard & Poor's 500 return of 5.1%
This screen is based on companies with high Piotroski F-Scores. Joseph Piotroski (the creator of the Piotroski F-Score) received widespread publicity within the investment community for his 2000 paper, "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers," which appeared in the Journal of Accounting Research (Vol. 38, Supplement: Studies on Accounting Information and the Economics of the Firm). Read more...
Seadrill Among Energy Stocks Trading With Low P/E Undervalued energy companies with P/E ratios lower than 5
These are the companies in the energy industry that are trading with the lowest P/E ratio, according to the All-In-One Screener from GuruFocus. Read more...
Third Avenue Management Profits From Encore Wire But Logs Loss From EP Energy The firm also gained from Rosetta Resources, TopBuild and Excel Trust
In third quarter trading, Third Avenue Management recorded both big profits and big losses. Read more...
Third Avenue Management Comments on EP Energy Corp Guru stock highlight
As the energy markets churned weaker over the quarter, we continued to look for attractive investment opportunities, as it was our sense that many investors were shooting first and asking questions later on their sales. We continue to believe that the current price weakness is a supply driven shock, and not what we believe would be a more worrisome lack of demand driven sell off. Read more...
Value-Screening Based on Piotroski F-Score Screen has history of besting Standard & Poor's 500 index
This screen is based on companies with high Piotroski F-Scores. Joseph Piotroski (the creator of the Piotroski F-Score) received widespread publicity within the investment community for his 2000 paper, "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers," which appeared in the Journal of Accounting Research (Vol. 38, Supplement: Studies on Accounting Information and the Economics of the Firm). Read more...

Ratios

vs
industry
vs
history
P/B 1.90
EPE's P/B is ranked lower than
76% of the 431 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 0.93 vs. EPE: 1.90 )
Ranked among companies with meaningful P/B only.
EPE' s P/B Range Over the Past 10 Years
Min: 0.3  Med: 0.95 Max: 2.39
Current: 1.9
0.3
2.39
P/S 0.61
EPE's P/S is ranked higher than
77% of the 416 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 1.73 vs. EPE: 0.61 )
Ranked among companies with meaningful P/S only.
EPE' s P/S Range Over the Past 10 Years
Min: 0.22  Med: 0.87 Max: 3.44
Current: 0.61
0.22
3.44
POCF 0.86
EPE's POCF is ranked higher than
88% of the 302 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 4.18 vs. EPE: 0.86 )
Ranked among companies with meaningful POCF only.
EPE' s POCF Range Over the Past 10 Years
Min: 0.32  Med: 2.23 Max: 5.06
Current: 0.86
0.32
5.06
Current Ratio 2.78
EPE's Current Ratio is ranked higher than
75% of the 487 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 1.32 vs. EPE: 2.78 )
Ranked among companies with meaningful Current Ratio only.
EPE' s Current Ratio Range Over the Past 10 Years
Min: 0.9  Med: 1.77 Max: 2.78
Current: 2.78
0.9
2.78
Quick Ratio 2.72
EPE's Quick Ratio is ranked higher than
75% of the 487 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 1.23 vs. EPE: 2.72 )
Ranked among companies with meaningful Quick Ratio only.
EPE' s Quick Ratio Range Over the Past 10 Years
Min: 0.88  Med: 1.74 Max: 2.72
Current: 2.72
0.88
2.72
Days Inventory 26.96
EPE's Days Inventory is ranked lower than
54% of the 208 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 23.74 vs. EPE: 26.96 )
Ranked among companies with meaningful Days Inventory only.
EPE' s Days Inventory Range Over the Past 10 Years
Min: 25.56  Med: 25.99 Max: 26.85
Current: 26.96
25.56
26.85
Days Sales Outstanding 38.64
EPE's Days Sales Outstanding is ranked higher than
56% of the 393 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 41.39 vs. EPE: 38.64 )
Ranked among companies with meaningful Days Sales Outstanding only.
EPE' s Days Sales Outstanding Range Over the Past 10 Years
Min: 27.69  Med: 38.64 Max: 53.5
Current: 38.64
27.69
53.5
Days Payable 86.59
EPE's Days Payable is ranked higher than
52% of the 253 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 82.81 vs. EPE: 86.59 )
Ranked among companies with meaningful Days Payable only.
EPE' s Days Payable Range Over the Past 10 Years
Min: 86.59  Med: 164.02 Max: 739.94
Current: 86.59
86.59
739.94

Valuation & Return

vs
industry
vs
history
Price/Tangible Book 1.90
EPE's Price/Tangible Book is ranked lower than
74% of the 408 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 1.03 vs. EPE: 1.90 )
Ranked among companies with meaningful Price/Tangible Book only.
EPE' s Price/Tangible Book Range Over the Past 10 Years
Min: 0.59  Med: 1.18 Max: 1.76
Current: 1.9
0.59
1.76
Price/Median PS Value 0.70
EPE's Price/Median PS Value is ranked lower than
57% of the 359 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 0.62 vs. EPE: 0.70 )
Ranked among companies with meaningful Price/Median PS Value only.
EPE' s Price/Median PS Value Range Over the Past 10 Years
Min: 0.64  Med: 0.79 Max: 0.94
Current: 0.7
0.64
0.94
Price/Graham Number 0.15
EPE's Price/Graham Number is ranked lower than
99.99% of the 158 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: 0.58 vs. EPE: 0.15 )
Ranked among companies with meaningful Price/Graham Number only.
EPE' s Price/Graham Number Range Over the Past 10 Years
Min: 0.3  Med: 0.30 Max: 0.3
Current: 0.15
Earnings Yield (Greenblatt) (%) -67.16
EPE's Earnings Yield (Greenblatt) (%) is ranked lower than
77% of the 501 Companies
in the Global Oil & Gas E&P industry.

( Industry Median: -13.30 vs. EPE: -67.16 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) (%) only.
EPE' s Earnings Yield (Greenblatt) (%) Range Over the Past 10 Years
Min: -67.16  Med: 20.30 Max: 23.9
Current: -67.16
-67.16
23.9

More Statistics

Revenue(Mil) $1908
EPS $ -15.36
Short Percentage of Float20.41%
52-Week Range $1.60 - 15.80
Shares Outstanding(Mil)248.75

Analyst Estimate

Dec16 Dec17 Dec18
Revenue(Mil) 1,576 1,031 1,242
EPS($) 0.73 -0.30 0.40
EPS without NRI($) 0.73 -0.30 0.40

Business Description

Industry: Oil & Gas - E&P » Oil & Gas E&P
Compare:TSX:PEY, NYSE:PE, TSX:VET, LSE:TLW, NYSE:CNX, NAS:GPOR » details
Traded in other countries:EPR.Germany,
EP Energy Corporation was incorporated on August 30, 2013. It is an oil exploration and production company. It is engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. Its operating areas include the Eagle Ford Shale, located in South Texas, Wolfcamp Shale, Altamont, and Haynesville Shale. The Company's oil and natural gas exploration and production activities are regulated at the federal, state and local levels in the United States and Brazil.
» More Articles for EPE

Headlines

Articles On GuruFocus.com
Seadrill Among Energy Stocks Trading With Low P/E Dec 29 2015 
Third Avenue Management Comments on EP Energy Corp Sep 25 2015 
EP Energy: Strong Operational Execution Makes This Oil Stock a Smart Investment May 06 2015 
EP Energy's Asset Profile Makes It a Good Investment Mar 29 2015 
Weekly CEO Buys Highlight: NRP, SFXE, OPK, EPE, OMN Oct 12 2014 
Weekly CEO Buys Highlight: FSFR, FSIC, OPK, EPE, ACXM Aug 23 2014 
Largest Insider Buys of the Week May 23 2014 

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