Brokerage firm Wunderlich Securities began coverage of exploration and production company Sandridge Permian Trust (PER:NYSE) on September 20, providing the company with a Buy rating and a target share price of C$21. Using this share price along with the trust's estimated yield based on annualizing fourth-quarter distributions, Wunderlich predicts a total return of 18 percent.
The brokerage firm provides its guidance that Sandridge Permian Trust is a good investment for several reasons, including its parent company who has repeatedly produced strong results, Wunderlich stated that the exploration and production company has a relatively high yield with a distribution that should rise over the next several years and rising commodity prices could increase distributions once the company's hedges expire.
Reuters reports that recent prices for natural gas have been affected by record production and decreased demand stemming from the weak economy. NYMEX front-month gas NGc1 crept up 2 cents to reach $3.829 per million British thermal units on September 19.
Sandridge Permian Trust opened at C$19.35 on September 20 after closing at C$19.25 the previous day. The company's stock has reached a 52-week high/low of C$19.36 and C$17.56, respectively.