Denbury Stock Story


USD 76.61  1.62  2.16%   

Denbury is scheduled to announce its earnings today. While some of us are becoming more enthusiastic about energy space, let's outline Denbury in greater detail to make a better estimate of its debt utilization. We will evaluate why recent Denbury price moves suggest a bounce in June. Here we also measure the ability of Denbury to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over three months ago
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How much will Denbury owe in June?

Denbury has 38.03 M in debt with debt to equity (D/E) ratio of 0.04, which may show that the firm is not taking advantage of profits from borrowing. The entity has a current ratio of 0.35, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Debt can assist Denbury until it has trouble settling it off, either with new capital or with free cash flow. So, Denbury's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Denbury sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Denbury to invest in growth at high rates of return. When we think about Denbury's use of debt, we should always consider it together with cash and equity.
Denbury financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Denbury, including all of Denbury's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Denbury assets, the company is considered highly leveraged. Understanding the composition and structure of overall Denbury debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Denbury Total Debt

Denbury liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Denbury has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Denbury balance sheet include debt obligations and money owed to different Denbury vendors, workers, and loan providers. Below is the chart of Denbury main long-term debt accounts currently reported on its balance sheet.
You can use Denbury financial leverage analysis tool to get a better grip on understanding its financial position

How important is Denbury's Liquidity

Denbury financial leverage refers to using borrowed capital as a funding source to finance Denbury ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Denbury financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Denbury's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Denbury, but it might be worth checking our own buy vs. sell analysis

What is driving Denbury Investor Appetite?

The firm reported the last year's revenue of 1.09 B. Reported Net Loss for the year was (118.05 M) with profit before taxes, overhead, and interest of 328.19 M.

Liabilities Breakdown

363.9 M
Current Liabilities
322.9 M
Long-Term Liabilities
Total Liabilities686.77 Million
Current Liabilities363.87 Million
Long-Term Liabilities322.89 Million
Tax Liabilities1.47 Million

Will Denbury slide back in June?

Mean deviation is down to 2.34. It may entail a possible volatility slide. Denbury exhibits very low volatility with skewness of 0.12 and kurtosis of 0.18. However, we advise investors to further study Denbury technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Denbury's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Denbury's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Denbury Implied Volatility

Denbury's implied volatility exposes the market's sentiment of Denbury stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Denbury's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Denbury stock will not fluctuate a lot when Denbury's options are near their expiration.

Our Final Perspective on Denbury

Whereas some companies in the oil & gas e&p industry are either recovering or due for a correction, Denbury may not be performing as strong as the other in terms of long-term growth potentials. With a relatively neutral outlook on the latest economy, it is better to hold off any trading of Denbury as the current risk-reward utility is not appealing enough. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Denbury.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Denbury. Please refer to our Terms of Use for any information regarding our disclosure principles.

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