Three Reasons to Sell Gulfport Energy Corporation (GPOR)

Getting more aggressive in the Utica
Because the Utica appears to be hit or miss, investors really need to watch Gulfport Energy Corporation (NASDAQ:GPOR)’s capital spending in the play. The company is spending $499 million of its planned $570 million-$590 million capital budget for the year. In essence, it’s really putting all of its eggs in one basket which has become less of a sure thing as the industry has invested capital into the play. Again, Gulfport appears to have found the best spot in the play; however, if the sweet spot turns out to be smaller than estimated, then the company could end up wasting a lot of precious capital.

Foolish bottom line
While I like Gulfport a lot, I have enough concerns to keep me on the sideline. In addition to the above concerns, investors have bid up the shares by nearly 150% over the past year due to enthusiasm over its position in the Utica. While the company’s position in the play seems to justify that enthusiasm, I’m not willing to pay up for the company’s stock in hopes that its big bet pays off.

The article 3 Reasons to Sell Gulfport Energy originally appeared on Fool.com is written by Matt DiLallo.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool owns shares of Devon Energy and has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy.

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