Buy Devon & Compton for gas gains

Article Excerpt

DEVON ENERGY CORP. $123.05 (New York symbol DVN; SI Rating: Speculative) (405-235-3611; www.devonenergy.com; Shares outstanding: 446.2 million; Market cap: $54.9 billion) is one of the largest U.S.-based independent oil and gas explorers and producers. Devon’s properties are located mainly in the United States and Canada and, to a lesser degree, various regions outside North America. The company has sold its operations in Egypt, and is nearing completion of the sale of its assets in West Africa for $3 billion. In the three months ended March 31, 2008, Devon’s revenues rose 20.3%, to $3 billion from $2.5 billion. Cash flow rose 79.6%, to $2.4 billion, or $5.48 a share, from $1.4 billion or $3.06 a share. Devon’s shares trade at 5.6 times annualized cash flow based on the latest quarter. Long-term debt of $6.4 billion is equal to 11% of market cap. Devon also holds cash of $1.9 billion or $4.25 a share. Devon currently has production of 2.5 billion cubic feet per day…