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Showing posts from October, 2018

Antero Resources ($AR): undervalued Marcellus shale play

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Antero resources is a natural gas and liquids exploration and production (E&P) company with acreage in Marcellus and Utica shales. It's shares have under-performed since going public in Oct 2013 ($60/share at time of IPO, $18/share in Sept 2018). Shale E&P's remain an unpopular area of the markets, and some of it is deserved due to capital destruction by many of the firms. In this article, I'll give a brief summary of my initial thesis on Antero, what's the bad side for this investment, and whether Antero is creating or destroying value with their drilling program.

Antero differs from the other stocks I typically write about or invest in, because:
1. It's not a small / micro cap stock, and is covered by several Wall Street firms,
2. It's in the commodity segment. And I have no special forecasting capability on the price of natural gas (But does anyone else, really?)

Yet I still invested in Antero because I believe it's undervalued. I first bought sm…