Citadel Sees Potential in a Small-Cap Energy Name

Since the end of the third quarter, Ken Griffin's Citadel Investment Group has gone from owning about 40,000 shares of the oil and gas producer Penn Virginia (PVA), according to its most recent 13F filing, to 2.6 million shares, per a recent 13G filing. Penn Virginia is a $210 million market-cap company, but over the last three months, an average of 1.4 million shares have been traded daily, and the current market price is about $4.60. As a result, we believe there is plenty of dollar volume in the stock. Penn Virginia operates in the onshore U.S.

The company's natural-gas production was down 46% in the third quarter of 2012 from the same period in 2011, while production of liquids (oil and natural gas liquids) was up. As a result, the company managed to shift its product mix from being two-thirds natural gas in the third quarter of 2011 (going by MMcf as a share of MMcfe) to about half natural gas last quarter, with the rest of output being oil and natural-gas liquids. As a result, while production fell 24% in terms of MMcfe, revenue was down only 8% from a year earlier....421 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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