My Investing Muse

  A stock screener was set to comb through small/nano-cap businesses in the US. The criteria include: Low Price/Free Cash Flow (less than 15) Sales growth past 5 years (more than 10%) Low Debt/Equity (less than 0.1) Low LT Debt/Equity (less than 0.1) Operating margin (over 5%) Net Profit margin (over 5)% The above criteria is a quick overview covering income statement, balance sheet & cash flow statements. This is just a quick overview and more detailed scrutiny is needed to give us better confidence in the business. From the screened stock list, one stock caught my attention (as the list is largely dominated by regional banks). Company of interest -  EPM  0.00%↑  Evolution Petroleum (EPM) Apart from the criteria above, EPM has displayed good financial fundamentals as per the table above. Let us look at the past performances of EPM Overview of EPM: Record revenue in 2022 (which is aided by the sky-high oil prices) at $109M Operating profit is $45M at an operating...

Surge in Oil prices Oil sits at the start of inflation as the energy resources go into every part of the market. Fuel costs cascades down into the energy, utilities, supply chain and then into products & services.  For businesses that can pass additional costs to customers, they will pass the costs increase to the customers.   Let us look at oil for a start and how this commodity can create an inflationary impact whenever the crude oil price surges: Oil price increase > fuel price increase > utilities cost increase > supply chain costs increase > goods and services price increase.  (This leads to inflation as costs go up.)  We need to understand that the challenge in the USA is not really due to the oil supplies but rather the bottleneck in the refinery capacity. US petroleum consumption will reach 20.51 million bpd (barrels per day) in 2022 US refinery capacity is short by 1 million barrels per day as per EIA chart above To meet the s...