Docstoc

husa_reuters

Document Sample
husa_reuters Powered By Docstoc
					Reuters Company Research




Houston American Energy Corporation (HUSA)                                                                                                                                                                           15 Mar 2010
Performance Rating: Outperform




2002                                                                                                                                                                                                                               2010



Share Price Summary                                                                 Overview                                                                          Percent Price Change                        HUSA         S&P 500
Close Price on 3/15/10......................................... $14.22              Float (mil)............................................................. 12.361   Year to Date..............................130.84............ 3.18
Absolute Price Change on 3/15/10............................ 0.86                   10 Day Average Volume (mil)................................... 0.277              One Year...................................583.65.......... 52.61
Percent Change..................................................... 6.04%           1 Day Volume Change on 3/15/10........................ 19.05%                     Two Years.................................242.65......... -10.68
Off 52-Week High.................................................-5.20%             Market Capitalization (mil).........................................$398          Three Years.............................. 148.17......... -17.05
Over 52-Week Low............................................ 800.00%                TTM Price/Earnings......................................................NA        Five Years........................................NA............... NA
Beta....................................................................... 1.957   Price/Earnings Current Fiscal Year Estimate...................NA                  Ten Years........................................ NA............... NA




Table of Contents
Reuters Rating ....................................... 2                            General Sentiment ..................................5                             Footprints of Success ............................. 8
Getting Acquainted ................................. 3                              Stock Price Rationale ..............................6
Share Price Trends .................................4                               Expectations and Credibility .....................7

                                                                                        REUTERS COMPANY REPORT DISCLAIMER

This research report is provided for informational purposes only and on the condition that it will not form the sole basis for any investment decision. Reference to any company is not a recommendation
to buy or sell the shares of such company. The information used for, or presented in, this report has been obtained from sources believed to be reliable, but Reuters makes no representation as to the
accuracy or completeness of such information. This report in intended only for users in the United States. Reuters has no obligation to update, modify or amend this report or to otherwise notify a reader
thereof in the event that any matter stated herein becomes inaccurate. Reuters and/or its affiliates/investors may hold securities positions in the companies discussed in this report and may frequently
trade in such positions. Such investments may be inconsistent with the quantitative analysis provided in this report.

This report was generated using a proprietary quantitative model that leverages widely accepted statistical methods and financial concepts to rank and rate a universe of more than 4700 US companies
and US-listed ADRs with a market capitalization greater than $50mm based on a series of financial attributes. These ratings are not intended as an indication of how an individual's investment will
perform. As used in this report, "Outperform" designates the companies that rank in the top 30% of companies covered by Reuters, "Neutral" designates the middle 40%, and the bottom 30% are
designated "Underperform". All ratings are relative to the universe of companies covered by Reuters and not to any specific benchmark.

© Reuters 2004. All rights reserved. This report may not be reproduced, modified, distributed or published without the prior written authorization of Reuters. Reuters and the sphere logo are the
trademarks or registered trademarks of the Reuters Group of companies around the world.
Houston American Energy Corporation (NASD:HUSA) -- Oil & Gas Operations/Energy                                                                                            Reuters Company Research

Performance Rating: Outperform
Reuters ratings are based on a proprietary model that leverages widely accepted statistical methods and financial concepts to select attributes shown to be strong indicators of future
stock price performance and applies these to rank stocks along a normal distribution curve. Ranks for Fundamental Quality, Value Catch-up, Operational Trends and Technical Factors
are combined into a Composite Rating of Outperform, Neutral or Underperform.

Reuters Composite Rating                                       Component Rating                                                                         Component Weight
We cannot guarantee that each stock will perform                                                                                                        Types of investment criteria differ in how useful
in accordance with its rank. But we do believe that                                                                                                     they are for predicting future stock movement.
over the long term, stocks rated Outperform (30%                                                                                                        Based on our research, the Composite Rank
of all stocks we rate) will, in the aggregate,                              Fundamental                                      Technical                  assumes these relative degrees of importance.
outperform stocks rated Neutral (40% of all stocks                            Quality                                         Factors




                                                                                             rm




                                                                                                                  Ou
                                                                                           fo
we rate), and that stocks rated Neutral will, in the




                                                                                        er




                                                                                                                   tp
                                                                                    tp




                                                                                                                       er
                                                                                                  l
aggregate, outperform stocks rated Underperform




                                                                                              ra
                                                                                   Ou




                                                                                                                          fo
                                                                                                              Ne
                                                                                            ut




                                                                                                                          rm
                                                                                                                ut
(30%). All analysis is based on publicly available




                                                                                          Ne
                                                                                                                                                        Fundamental Quality 36%




                                                                                                    r



                                                                                                                  ra
                                                                                                         Un
                                                                                                  de




                                                                                                                   l
                                                                                                            de
company financials, fundamental ratios, relative




                                                                                              Un



                                                                                                              r
rankings of financial data and ratios, and observed
                                                                                                                                                        Technical Factors 27%
security prices.




                                                                                                            r
                                                                                                          de
                                                                                                  Un


                                                                                                         Un
                                                                                                   de




                                                                                                                  l
                                                                                          Ne




                                                                                                                ra
                                                                                                     r



                                                                                                              ut
                                                                                            ut
                                                                                                                                                        Operational Trends 13%




                                                                                                                         rm
                                                                                  Ou




                                                                                                            Ne
                                                                                              ra
 Underperform           Neutral         Outperform




                                                                                                                        fo
                                                                                                  l
                                                                                    tp




                                                                                                                     er
                                                                                       er




                                                                                                                  tp
                                                                                          fo




                                                                                                               Ou
                                                                                            rm
HUSA shares are presently rated OUTPERFORM.                                                                                                             Value Catch-up 24%
No forecast is made for the stock market as a whole.                          Value                                      Operational
However, we do believe that whichever way the market                         Catch-up                                     Trends
moves, stocks rated OUTPERFORM have, in the
aggregate, a higher probability of performing better than                                                                "Under" = Underperform         Technical Factors: Outperform
most others.
                                                                                                                                                        This rating is based on analyses of share price
                                                                                                                                                        movements over a variety of time periods. We
Fundamental Quality Component: Underperform                                                                                                             compare performance characteristics of individual
This rating is based on characteristics traditionally associated with "good" companies. We focus on how each company                                    stocks with those of all the others we rate.
measures up against others, and give careful attention to recent improvement or slippage relative to other companies.                                   Generally speaking, our goal is to favor up-trending
TTM = Trailing Twelve Months.                                                                                                                           shares that have experienced recent corrections
                                                                                                                                                        and de-emphasize down-trending shares
                                                            Very Negative     Negative            Neutral            Positive       Very Positive
                                                                                                                                                        experiencing uncharacteristic periods of strength.
TTM Return on Investment                                                                                                                                Here is how HUSA shares performed during the
Improvement in TTM Return on Investment                                                                                                                 various periods we examined.
TTM Pretax Margin
Improvement in TTM Pretax Margin                                                                                                                        Price Change
Depreciation in Excess of Capital Spending Needs                                                                                                        Past 7 days                                     8.3%
                                                                                                                                                        Past 30 days                                   66.9%
Issuance/Repurchase of Common Shares                                                                                                                    Past 60 days                                  112.2%
Common Shares Dilution
Presence/Absence of Unusual Income Items
                                                                                                                                                        Change for Past 180 Days: 378.8%
Value Catch-up Component: Neutral
                                                                                                                                                                                                        $14.22
This rating measures the extent to which the share price adequately reflects improving or eroding fundamentals, and favors
shares whose prices have been slower to "catch up" to improving performance measures. TTM = Trailing Twelve Months.
                                                                                                                                                        $2.97
                                                            Very Negative     Negative            Neutral            Positive       Very Positive
                                                                                                                                                        Open on 9/17/09                        Close on 3/15/10
Price Catch-up with TTM Earnings
Price Catch-up to TTM Sales
Price Catch-up to TTM Free Cash Flow                                                                                                                    Change Between 60 and 30 Days Ago: 27.2%
Price Catch-up to MRQ Book Value


Operational Trends Component: Neutral
                                                                                                                                                                                      $6.70
                                                                                                                                                                                                    $8.52
This rating reflects how strong a company's recent Sales and EPS (reported as per GAAP) growth have been relative to other
companies we rate. MRQ = Most Recent Quarter. TTM = Trailing Twelve Months.                                                                             Open on 1/15/10                        Close on 2/12/10
                                                            Very Negative     Negative            Neutral            Positive       Very Positive
Most Recent Quarter EPS Growth
Improvement in EPS Growth for Consecutive Quarters                                                                                                      Change Between 180 and 60 Days Ago: 125.6%
Improvement in EPS Growth (MRQ vs. TTM)
Most Recent Quarter Sales Growth
Improvement in Sales Growth (MRQ vs. TTM)
                                                                                                                                                                                           $6.70
                                                                                                                                                        $2.97
Peer Comparison                                                                                                                                         Open on 9/17/09                        Close on 1/15/10
This section shows the comparison of key components between HUSA and several of its peers.
                                              Composite         Fundamental          Technical                       Value               Operational    Change Between 180 and 90 Days Ago: 87.9%
Company Name (Ticker)                            Rating              Quality           Factors                    Catch-up                   Trends
Houston America... (HUSA)                    Outperform        Underperform         Outperform                     Neutral                  Neutral
Aztec Oil & Gas, Inc. (AZGS)
ATP Oil & Gas Corporati... (ATPG)              Outperform        Underperform           Outperform                      Neutral          Underperform
                                                                                                                                                                                  $5.58
McMoRan Exploration Co. (MMR)                      Neutral       Underperform           Outperform                      Neutral          Underperform   $2.97
Avalon Oil and Gas, Inc... (AOGN)
                                                                                                                                                        Open on 9/17/09                       Close on 12/16/09




March 15, 2010                                                                                                                                                                                           Page 2
Houston American Energy Corporation (NASD:HUSA) -- Oil & Gas Operations/Energy                                                                          Reuters Company Research

Getting Acquainted
Start your analysis by learning what the company does, how well it does it, where it stands relative to peers, and whether aspects of the corporate structure or capitalization are
bothersome to you.


Business Summary                                                                                                                      Contact Info
Houston American Energy Corp. (HUSA) is an oil and gas exploration and production company. The Company's oil                          Houston American Energy Corporation is
and gas exploration and production activities are focused on properties in the United States onshore Gulf Coast                       headquartered at:
Region, principally Texas and Louisiana, and development of concessions in the South American country of                              801 Travis Street, Suite 2020, Houston, TX,
Colombia. Its exploration projects are focused on existing property interests, and future acquisition of additional                   77002
property interests, in the onshore Texas Gulf Coast region, Colombia and Louisiana. Each of the Company's                             United States
exploration projects differs in scope and character and consists of one or more types of assets, such as                              (713) 222-6966
three-dimensional (3-D) seismic data, leasehold positions, lease options, working interests in leases, partnership or                 www.houstonamericanenergy.com/
limited liability company interests or other mineral rights.                                                                          C.Neil Lyons, CFO

Financial Trends
TTM = Trailing Twelve Months, * = Most Recent Quarter.
                                                                                                                                                    Historic Growth Rates
Fiscal Year Ending              12/31/04         12/31/05          12/31/06           12/31/07         12/31/08              TTM                3 Year          5 Year                 10 Year
Sales (mil)                           $1.2            $2.8              $3.2               $5.0            $10.6              $6.0               55.23               116.95                   NA
EPS (GAAP)                           $0.01          ($0.03)           ($0.02)             $0.02            $0.02            ($0.19)                 NA                   NA                   NA
Dividends/Share                      $0.00           $0.00             $0.00              $0.00            $0.02             $0.03                  NA                   NA                   NA
Book Value/Share                     $0.06           $0.04             $0.70              $0.73            $0.75           * $0.72              174.23                86.18                   NA
Tangible Book Value/Sh.              $0.06           $0.04             $0.70              $0.73            $0.75           * $0.72              174.23                86.18                   NA
Cash Flow/Share                      $0.02          ($0.01)            $0.01              $0.06            $0.22             $0.02                  NA                   NA                   NA
Free Cash Flow/Share                ($0.02)         ($0.04)           ($0.09)            ($0.15)          ($0.37)           ($0.31)                 NA                   NA                   NA



Key Ratios
                                                                                                                                                           Historic Averages
Fiscal Year Ending              12/31/04         12/31/05          12/31/06           12/31/07         12/31/08              TTM                3 Year               5 Year            10 Year
% Sales Growth                       437.6            139.1             12.8               55.4            113.4             (42.6)               60.5                 151.6                  NA
% EPS Growth                        (126.1)         (532.7)            (18.8)            (186.0)             (6.0)         (196.5)               (70.3)              (173.9)                  NA
% Gross Margin                        65.0             69.0             68.2               63.0              68.3             46.2                66.5                  66.7                  NA
% Operating Margin                    15.7             25.2              (3.1)              (0.6)             0.9          (193.7)                 (0.9)                 7.6                  NA
% Tax Rate                             0.0          (193.6)       (51,100.0)               20.5            (18.7)               NA          (17,032.8)            (10,258.4)                  NA
% Return on Assets                     5.4            (13.4)             (4.1)               2.4              2.1            (22.8)                 0.2                 (1.5)                 NA
% Return on Investment                 6.0            (25.6)             (4.8)               2.5              2.2            (23.1)                (0.0)                (4.0)                 NA
% Return on Equity                    12.5            (52.7)             (5.1)               2.5              2.2            (23.3)                (0.1)                (8.1)                 NA
Asset Turnover                         0.6              0.8               0.3                0.2              0.5              0.3                  0.3                  0.5                  NA
Receivables Turnover                   7.8              7.0               7.1              11.0               8.3              6.0                  8.8                  8.2                  NA
Inventory Turnover                     NM               NM                NM                 NM               NM                NA                   NA                   NA                  NA



Equity Information                                                                                                                    Analyst Footnotes
Whether you are willing to accept companies that have or don't have major shareholders with controlling ownership blocks,             Look for accounting changes, restructurings,
multiple classes of common, or convertible debt or preferred issues is a matter of individual preference. Look here for               etc.which may affect how useful historic data is
anything along these lines that might make you more or less inclined to invest in this company.                                       inassessing future company prospects.
Common Stock $.0001 Par, 11/09, 100M auth., 28,000,772 issd. Insiders control approx. 55.86% 07/07, Company delisted from AMEX        There are no analyst footnotes available at this time for
to NASDAQ.                                                                                                                            Houston American Energy Corporation


Peer Comparison
This table gives an indication of how Houston American Energy Corporation stands in key respects compared with companies in the Oil & Gas Operations Industry
                                                          Current Fiscal                                          Current Fiscal      P/E Based on
                                      Last Fiscal Year   Year Projected            Projected                     Year Projected       Current Year EPS % Growth                 EPS % Growth
Company Name (Ticker)                   Revenue (mil)     Revenue (mil)          Price/Sales    Operating EPS               EPS          Estimates Previous 5 Years              Next 5 Years
Houston America... (HUSA)                       $10.6                NA                  NA             $0.02                NA                NA               NA                        NA
Aztec Oil & Gas, Inc. (AZGS)                     $0.2                NA                  NA            ($0.05)               NA                    NA                   NA                   NA
ATP Oil & Gas Corporati... (ATPG)              $312.2            $667.9                 1.4             $3.39             $1.69                  11.2                   NA                   NA
McMoRan Exploration Co. (MMR)                  $435.4            $506.9                 3.1            ($2.79)           ($0.76)                  NM                    NA                   NA
Avalon Oil and Gas, Inc... (AOGN)                $0.3                NA                  NA            ($0.04)               NA                    NA                   NA                   NA




March 15, 2010                                                                                                                                                                             Page 3
Houston American Energy Corporation (NASD:HUSA) -- Oil & Gas Operations/Energy                                                                        Reuters Company Research

Share Price Trends
Stock price trends depict the collective opinion of the investment community. You don't have to agree with consensus views but seeing how others feel can help you decide what to
look for as you go further in your analysis. Consider it similar to reading a review before seeing a movie.


1 Year Price Chart with Bollinger Bands and Relative Strength
Technical analysts believe a narrowing of the bands suggests a significant price movement, up or down, will soon occur. Also, many say stocks that move outside the bands and then
back inside will soon move toward the opposite band. The Relative Strength Index (RSI) calculates the strength of the current price movement compared to other recent moves and
may signal when a trend is unsustainable. Technical analysts also believe RSI peaks/valleys forecast changes in share price trends.


                                                                                                                                                                         High: 15.00   $15.00



                                                                                                                                                                                         10.60



                                                                                                                                                                                          6.20



                                                                                                                                                                                          1.80
       Low: 1.58

Relative Strength Indicator                                                                                                                                                              100%
                                                                                                                                                                                          50%


Volume (mil)

                                                                                                       Average Volume
                                                                                                                                                                                          0.10
                 Apr' 09              May                Jun               Jul          Aug          Sep                Oct             Nov     Dec   Jan' 10      Feb




10 Year Price Chart (Monthly)                                                                                5 Year Price Chart (Monthly)

                                                                                               $15.00                                                                                  $15.00



                                                                                                 10.00                                                                                   10.00



                                                                                                  5.00                                                                                    5.00




                                                                                               0.0009                                                                                    0.001

           2001          2002   2003        2004     2005      2006       2007   2008   2009   Vol (bil)          2005          2006          2007    2008         2009                Vol (bil)




6 Month Price Chart (Daily)                                                                                  1 Month Price Chart (Daily)

                                                                                               $15.00                                                                                  $15.00


                                                                                                                                                                                         13.40

                                                                                                 10.00
                                                                                                                                                                                         11.80


                                                                                                                                                                                         10.20
                                                                                                  5.00

                                                                                                                                                                                          8.60




                                                                                                  0.12                                                                                    0.35

               Oct' 09          Nov                Dec          Jan' 10          Feb           Vol (mil)                      Feb' 10                        Mar                       Vol (mil)




March 15, 2010                                                                                                                                                                           Page 4
Houston American Energy Corporation (NASD:HUSA) -- Oil & Gas Operations/Energy                                                                            Reuters Company Research

General Sentiment
You can follow popular opinion or choose a contrarian's strategy. Either way, you should know whether the Street is bullish or bearish. Investor sentiment is typically positive when
the 50-day moving average is rising, especially if it's also above the 200-day moving average. Additionally, changes in price trend can be deemed more definitive if supported by
higher than normal volume.

52 Week Price History

                                                                                                                                                                                              $15.00




                                                                                                                                                                                               10.60




                                                                                                                                                                                                6.20
200 Day Moving Average




                                                                                                                                                                                                1.80
                                       50 Day Moving Average



Volume (mil)
                                                                                             Average Volume
                                                                                                                                                                                                0.10
               Apr' 09      May            Jun                 Jul              Aug          Sep              Oct             Nov          Dec           Jan' 10          Feb



Price History
Calendar Year               2001                 2002                   2003              2004                 2005                 2006            2007                2008                  2009
High Price                     NA                 0.75                  0.75               1.35                 3.99                8.05             7.35               11.98                   6.19
Low Price                      NA                 0.05                  0.23               0.70                 0.76                1.75             2.30                2.01                   1.58
Year End Price                 NA                 0.36                  0.73               0.98                 3.15                7.36             3.05                3.38                   6.16

High P/E                       NA                  NA                     NA                 NA                     NA               NA                NA               90.79                     NA
Low P/E                        NA                  NA                     NA                 NA                     NA               NA                NA               10.04                     NA
Year End P/E                   NA                  NM                     NM             168.67                     NM               NM            172.41                 NM                      NA
Dividend Yield                 NA                  NM                     NM                NM                      NM               NM               NM                 0.59                     NA


Price Performance                                                                                                                          Insider Trading
When stocks significantly beat or trail the S&P 500 or the industry, investors are looking more intently at company- specific              Insider buying can be seen as bullish because,
matters than general-market factors. In the two percentile rank columns, a high "Rank in Industry" coupled with a low                      presumably, their company knowledge is superior.
"Industry Rank" could signify a hot stock in a cold industry. The reverse, is also noteworthy.                                             However, insider sales are less reliable because
                                                                                                                                           insiders may sell for a variety of reasons that have
                            Actual            Percent                     vs.                vs.           Rank in             Industry
                                                                                                                                           nothing to do with their opinion of the stock.
Time Period                Change             Change                 S&P 500            Industry          Industry                Rank
4 Week                        5.70                66.9%                56.0%              59.5%                     96                14
                                                                                                                                           In the last 6 months, there have been no insider
13 Week                       8.86               165.3%               156.9%             145.5%                     96                50   purchases, and there have been no insider sales.
26 Week                      11.44               411.5%               366.5%             352.6%                     98                44
52 Week                      12.02               546.4%               325.0%             298.7%                     95                39   Net Change (6 months)                               0 mil
                                                                                                                                           6 Month Net Transactions                               0
Year To Date                  8.06               130.8%               123.7%             123.4%                     95                28

                                                                                                                                           Institutional Ownership
BarChartKey                                                                                         Rank Key                               It's worthwhile to know what institutions are doing
YTD R 4 Wk.                                                                                         Worst R Best         1 R 100           simply because their stock positions can be so
                                                                                                                                           large. In the short term, stocks will perform well if
Short Interest                                                                                                                             institutions are buying and perform poorly if
                                                                                                                                           institutions are selling.
A high or increasing short interest implies that many investors expect the stock price to decline. You can treat that as a
warning. Or you can disagree with the crowd and buy stocks with high short interest in anticipation of a short squeeze (a rally            34 institutions own 20.2% of the 0.03 billion common
that occurs when short sellers rush to buy a stock, fearing losses they might incur if they wait too long). Prospects for a                shares outstanding. This is lower than the average
squeeze are indicated by high readings in the "Days to Cover" column (which tells how many days it would take for all short                institutional ownership of the Oil & Gas Operations
interest positions to be covered if recent trading volume levels persist). The risk: The bears may be right. So research other             Industry at 41.7%, and lower than the average of the
aspects of the company.                                                                                                                    S&P 500 as a whole which is 68.2%.
Month                     Shares % Outstanding                       Percent of Float                         Days to Cover                Net Change (3 month)                              8.6%
February 2010            516,650                  1.67                  4.18                                    1.24                       Net Purchases (3 month)                        2.44 mil
January                  124,840                  0.40                  1.01                                    0.95                       Shares Purchased (3 month)                     2.57 mil
December                 109,720                  0.35                  0.89                                    1.86                       Shares Sold (3 month)                          0.13 mil
November                  99,130                  0.32                  0.80                                    2.00




March 15, 2010                                                                                                                                                                                Page 5
Houston American Energy Corporation (NASD:HUSA) -- Oil & Gas Operations/Energy                                                                           Reuters Company Research

Stock Price Rationale
Determine if the stock price is justified by: growth-based value, comparative value, liquid assets, or dividends. The better the company, (in terms of growth or quality), the higher the
valuation measures can be. And if valuation ratios are extremely low, double-check to see if the company appears excessively weak. In any case, you don't have to say yes to any
valuation measure - many buy shares based on other factors (e.g., growth). But if you do that, at least understand what you're doing and consider the risks.

Viewing Things In Context
Many people erroneously work with valuation ratios calculated based on numbers that aren't truly representative of a company's underlying sustainable financial characteristics. Thus
it's important to determine if today's sales and EPS are significantly depressed or elevated due to temporary factors such as business cycles. Higher ratios can be tolerated if sales and
EPS are temporarily depressed. But if the company is experiencing unsustainable boom conditions, seek lower ratios. GAAP = Generally Accepted Accounting Principles.

Fiscal Year Ending            12/31/02           12/31/03         12/31/04           12/31/05            12/31/06           12/31/07           12/31/08            12/31/09E               12/31/10E
Sales/Share                       $0.00              $0.01             $0.06             $0.14               $0.13              $0.18              $0.38                     NA                   NA
Price/Sales                          NA                 NA                NA             20.74               38.78              16.11              10.06                     NA                   NA
EPS (GAAP)                       ($0.03)            ($0.02)            $0.01            ($0.03)             ($0.02)             $0.02              $0.02                     NA                   NA
P/E (GAAP)                           NA                 NA                NA                NM                  NM             162.30                 NM                     NA                   NA
EPS (Normalized)                 ($0.03)            ($0.02)            $0.01            ($0.02)             ($0.02)             $0.03             ($0.03)                    NA                   NA
P/E (Normalized)                     NA                 NA                NA                NM                  NM              90.16                 NM                     NA                   NA
Dividend Yield (%)                   NA                 NA                NA              0.00                0.00               0.00               0.52                     NA                   NA


Valuation Based On Growth
The faster a company grows, the higher its stock's P/E can be. Contrary to popular belief, PEG (P/E over Growth Rate) need not always be 1.00 or less. But all else being equal, lower is
better (and 3.00 is usually too high). Try to favor company PEGs that are lower than industry and market PEGs. In all cases, watch for very high growth estimates. If overly optimistic
projections get cut, PEG would wind up being higher. FY = Fiscal Year.

                                           Price/EPS (Est.) for Current FY        Price/EPS (Est.) for Next FY           Long Term Growth Estimate                Next FY P/E over LT Growth
Houston American Energy Corporation                  NA                                   NA                                      NA                                        NA
Oil & Gas Operations                              21.49                                14.80                                   10.46                                      1.63
S&P 500                                           16.33                                13.70                                   10.51                                     (0.60)

Comparative Valuation Ratios                                                                                                            Dividends
Valuation below industry or S&P 500 averages can be attractive - unless the company is materially worse in terms of quality             Dividend is the most classic basis for
growth prospects. Year-by-year trends in comparative valuations can give clues about company merit. Be especially on guard              stockvaluation, and high dividend yields are
if comparative ratios are deteriorating over time. On the other hand, relatively low valuations that are moving toward the              usuallydeemed preferable. Today, with many
averages might indicate that the market is tuning in to heretofore under-appreciated company merit.                                     companiesreinvesting profits back into the
FY = Fiscal Year, TTM = Trailing Twelve Months, * = Most Recent Quarter.                                                                business, moderateor low yields can be accepted if
Houston American Energy Corporation                                                                                                     dividends growrapidly. The main risk is that poor
                                                                                                                                        performance willcause the dividend to be cut or
                            Price/              Price/           Price/            Price/              Price/         Price/Free        omitted. A very highpayout ratio is one warning
                         Earnings               Sales             Book         Cash Flow          Tang. Book          Cash Flow         signal. Another is ayield that is very high relative to
Trailing 12 Months               NA              66.49           * 19.83           584.69              * 19.83                NA        industry peers.
FY Ending 12/31/08              NM               10.06              5.07            17.01                 5.07            (10.16)       TTM = Trailing Twelve Months.
FY Ending 12/31/07           162.30              16.11              3.93            50.30                 3.93            (18.47)
FY Ending 12/31/06              NM               38.78              7.12              NM                  7.12            (54.81)
FY Ending 12/31/05              NM               20.74             80.92              NM                 80.92            (65.75)                                                 HUSA       Industry
                                                                                                                                        Current Dividend Yield                     0.1%         1.5%
                                                                                                                                        5 Yr. Avg. Dividend Yield                  0.0%         1.1%
Bar Chart Key                                                                                                                           5 Yr. Dividend Growth Rate                   NA        19.9%
2005 R TTM                                                                                                                              TTM Payout Ratio                              NA       20.0%
                                                                                                                                        5 Yr. Average Payout Ratio               986.0%        13.3%
Oil & Gas Operations
                            Price/              Price/           Price/            Price/              Price/         Price/Free
                         Earnings               Sales             Book         Cash Flow          Tang. Book          Cash Flow
Trailing 12 Months            27.71               4.44            * 2.62            12.09               * 2.87             50.02        Liquid Assets
FY Ending 2008                11.97               2.09              1.69            18.51                 1.56              3.22
FY Ending 2007                19.94               3.85              3.03             9.35                 3.09             (1.17)       Get a general sense of the extent to which the
FY Ending 2006                13.24               3.11              2.68             6.99                 2.74              4.00        stockprice is offset by the presence of assets that
FY Ending 2005                16.57               3.81              3.55             8.79                 3.69             10.26        can beconverted to cash immediately or in the near
                                                                                                                                        future. Often, these ratios will not be meaningful.
                                                                                                                                        Most companies are valued as ongoing businesses,
                                                                                                                                        rather than liquidation/buyout prospects. If you're
Bar Chart Key                                                                                                                           lookingat an especially troubled company, be aware
2005 R TTM
                                                                                                                                        that seemingly liquid-asset windfalls can be
                                                                                                                                        dissipatedby continuing operating losses and/or
S&P 500
                                                                                                                                        shutdown costs.
                            Price/              Price/           Price/            Price/              Price/         Price/Free
                         Earnings               Sales             Book         Cash Flow          Tang. Book          Cash Flow
Trailing 12 Months            20.68               2.50            * 3.49            14.43               * 6.27             21.09        Price to ...                              HUSA       Industry
FY Ending 2008                17.06               2.33              3.31            10.56                 3.64             22.84        General Working Capital                   58.3           15.3
FY Ending 2007                22.91               2.88              4.13            15.05                 5.86             26.68        (current assets minus current liabilities)
FY Ending 2006                20.68               2.91              3.83            14.10                 5.29             29.96
FY Ending 2005                23.66               3.39              4.19            16.10                 6.10             21.44        Net Working Capital                        60.7          (3.2)
                                                                                                                                        (current assets minus all liabilities)

Bar Chart Key                                                                                                                           Cash (& cash equivalents)                   84.6         30.1
2005 R TTM                                                                                                                              Cash minus total debt                       84.6         (9.7)
                                                                                                                                        Cash minus all liabilities                  91.1         (2.4)


March 15, 2010                                                                                                                                                                                  Page 6
Houston American Energy Corporation (NASD:HUSA) -- Oil & Gas Operations/Energy                                                                                             Reuters Company Research

Expectations And Credibility
In theory, stock prices are based on the "present value" of expected future company cash flows. Therefore, we try to obtain accurate estimates of future financial performance. But
remember, these are just estimates. Since we cannot really know what will happen tomorrow, we evaluate estimates critically by seeking clues that help us distinguish between
normal versus excessive degrees of uncertainty.

Estimates In Context
Below are the present consensus revenue and EPS estimates. Notice whether analysts expect recent year-to-year growth trends to persist, or are forecasting sharp improvement or
deterioration. The sharper the predicted change, the greater the level of uncertainty in the forecast. (GAAP = Generally Accepted Accounting Principles)

                                                                Revenue ($mil)                                                                     GAAP Earnings Per Share ($)
                              Mar 31st            Jun 30th          Sep 30th             Dec 31st         Year Total       Mar 31st             Jun 30th     Sep 30th      Dec 31st                      Year Total
FY Ending 12/2006                        0.7               0.8                0.9              0.8               3.2            (0.01)               (0.00)               (0.00)          (0.01)              (0.02)
FY Ending 12/2007                        1.0               1.0                1.2              1.8               5.0            (0.00)               (0.02)                0.01            0.03                0.02
FY Ending 12/2008                        2.9               3.3                2.4              2.0              10.6             0.03                 0.11                 0.03           (0.16)               0.02
FY Ending 12/2009                        0.4               1.1                2.4              NA E              NA E           (0.05)                0.00                 0.02              NA E                NA E
FY Ending 12/2010                        NA E              NA E               NA E             NA E              NA E              NA E                 NA E                 NA E            NA E                NA E


Confidence In Estimates                                                                                                                                EPS Estimate Accuracy
The range of estimates can be measured by standard deviation. The narrower the range (the lower the standard deviation                                 Assess the extent to which analysts are
compared to the "mean" estimate) and/or the greater the number of analysts, the more definitive the expectations. Note, too,                           accurateand have a handle on the earning trends
the extent to which company expectations are consistent with or diverge from those for industry and/or market.                                         bycomparing Estimates to Actual figures (which
                                                                                                                                                       mayomit various charges/credits included in
              Long Term Growth Rate                                                             Near Term Growth Rate                                  GAAPresults). The Actual figures are the ones that
             Mean # of Estimates Standard Dev.                                                 Mean # of Estimates Standard Dev.                       aremost comparable in accounting method to the
                                                                                                                                                       Estimates. (GAAP = Generally Accepted Accounting
                  NA                NA                    NA              HUSA                      NA                  NA                   NA
                                                                                                                                                       Principles)
                 10.5                2                  3.06              Industry                  7.3                  9                20.12
                 10.5                5                  3.44              S&P 500                   4.2                 13                 7.15                      There is not enough data to dislpay EPS
                                                                                                                                                                          estimate accuracy for HUSA.
Reasonableness
Look at the tables below to see if analysts are expecting the company to accomplish more than it has accomplished in the                               Quarterly EPS Estimate Revisions
past. Such things can and do happen. But the stronger the predicted future (compared to the past), the greater the burden of
proof on the part of those issuing the estimates.                                                                                                      Current Period

Annual Growth              EPS (%)              Sales (%)                            Quarterly Growth             EPS (%)           Sales (%)             There is currently not enough data available to use
5 year Estimate                   NA                      NA                                                                                                 to display quarterly EPS estimate revisions.
2009 Estimate                     NA                      NA
Last 5 years                      NA                   117.0
Last 3 years                      NA                     55.2                                                                                                  May             Aug           Nov              Feb
Last Year                       (6.0)                  113.4
Trailing 12 Months           (196.5)                   (42.6)                                                                                          Next Period

                                                                                                                                                          There is currently not enough data available to use
Analyst Recommendation Trends                                                                                                                                to display quarterly EPS estimate revisions.
Difference of opinion is normal, so don't demand unanimity. Look for ratings clusters in a part of the best-to-worst scale and
at Mean Rating scores. Also important is whether analyst sentiment is improving or declining over time.
                                                                                                                                                               May             Aug           Nov              Feb
                                Buy         Outperform                    Hold         Underperform                   Sell               Mean          Period After Next
                           (Value 1)          (Value 2)               (Value 3)            (Value 4)             (Value 5)              Rating
As of 3/15/10                       NA                    NA                    NA                  NA                  NA                      NA        There is currently not enough data available to use
As of 4 Weeks ago                   NA                    NA                    NA                  NA                  NA                      NA           to display quarterly EPS estimate revisions.
As of 8 Weeks ago                   NA                    NA                    NA                  NA                  NA                      NA
As of 12 Weeks ago                  NA                    NA                    NA                  NA                  NA                      NA
                                                                                                                                                               May             Aug           Nov              Feb

Bar Chart Key                                                                                                                   Mean Rating
12 Wks ago R 3/15                                                                                                                  1.00 = Best
                                                                                                                                  5.00 = Worst

Annual EPS Estimate Revisions
Since estimates address an unknowable future, revision (often prompted by company guidance) is to be expected. Investors are usually happy when analysts are scrambling to chase
reality upward. So increases in estimates tend to spark strong share price performance. The reverse is usually true when estimates are falling.




                                                         There is currently not enough data available to use to display annual EPS estimate revisions.




                 Apr' 09      May                Jun                Jul                Aug                Sep           Oct               Nov                  Dec              Jan' 10            Feb



March 15, 2010                                                                                                                                                                                                      Page 7
Houston American Energy Corporation (NASD:HUSA) -- Oil & Gas Operations/Energy                                                                       Reuters Company Research

Footprints of Success
In many respects, business success requires subjective judgment. However, over time, good companies tend to leave good footprints, which become most visible when company data
is compared to industry/sector/market benchmarks. That's how you see when companies perform well, not just because a rising business tide lifts all boats, but because the company
is doing unique, good things. Look, too, at time-series comparisons, and take note of companies that are improving faster or suffering less than peers.

Growth Rates (%)
Investors are accustomed to looking at EPS growth. Check sales growth, too. EPS gains can't persist indefinitely without good sales growth. Do further investigation if sales trends are
falling short. (A big short fall might reflect a divestiture. On the other hand, if sales growth looks too good, check to see if it's being boosted by an acquisition.) Also, compare sales
growth to capital spending growth. Over a prolonged period, it's reasonable to expect capital spending growth to more or less keep pace with sales growth. If the latter is significantly
higher, capital spending may have to accelerate in the next few years.
                                                                                                                  Company Rank                 HUSA               HUSA              HUSA
% Growth Rate                                    HUSA           Industry             Sector           S&P 500        in Industry        vs. Industry         vs. Sector       vs. S&P 500
Sales Growth For Most Recent Quarter                2.3               7.1                1.1                6.7                68
Sales Growth For Trailing 12 Months              (42.6)            (31.3)             (33.6)              (4.2)                50
Sales Growth For Past 5 Years                    117.0               18.0               11.0                9.9                91

Capital Spending Growth for Past 5 Years          69.9               20.5              20.2                 6.4                78

EPS Growth for Most Recent Quarter                (46.1)             22.2              (14.6)             21.5               44
EPS Growth for Trailing Twelve Months           (196.5)            (41.6)             (48.5)               5.2               NA
EPS Growth for Past 5 Years                          NA              12.9                9.1              11.7               70             NA                 NA                 NA
                                                                                                                    Worst R Best          = Co. underperforming        = Co. outperforming

Company Quality
Some companies excel in obtaining high margins (watch out for very low tax rates, which may reflect special benefits that often won't persist indefinitely) while others are highly
efficient. Still others are strong in both respects. These trade-offs are balanced in the Management Effectiveness returns, which combine both factors. TTM = Trailing Twelve Months.

                                                                                                                  Company Rank                 HUSA               HUSA              HUSA
Profitability Ratios (%)                         HUSA           Industry             Sector           S&P 500        in Industry        vs. Industry         vs. Sector       vs. S&P 500
Gross Margin for Trailing Twelve Months            46.2             67.0               40.2               45.4                 32
Gross Margin for Past 5 Years                      67.0             68.5               41.5               45.2                 49
Operating Margin for Trailing Twelve Months     (193.7)               3.6              10.0               17.4                 NA
Operating Margin for Past 5 Years                   3.8             28.2               20.4               18.5                 53
EBITD Margin for Trailing Twelve Months           (93.1)            30.3               22.8               23.3                  0
EBITD Margin for Past 5 Years                      40.5             45.0               29.4               23.0                 71
Pretax Margin for Trailing Twelve Months        (191.7)               9.1              10.5               15.4                 NA
Pretax Margin for Past 5 Years                      4.2             26.0               19.4               17.5                 45
Net Margin for Trailing Twelve Months             (89.2)             (3.0)              4.5               11.8                  3
Net Margin for Past 5 Years                         0.2             15.1               12.0               12.3                 32
Effective Tax Rate for Trailing Twelve Months       NA              35.5               37.2               29.0                 NA           NA                 NA                 NA
Effective Tax Rate for Past 5 Years                94.0             38.7               36.9               30.1                 35
                                                                                                                  Company Rank                 HUSA               HUSA              HUSA
Efficiency Ratios (TTM)                          HUSA           Industry             Sector           S&P 500        in Industry        vs. Industry         vs. Sector       vs. S&P 500
Asset Turnover                                      0.3              0.4                0.7               0.9                  72
Receivables Turnover                                6.0              7.4                8.5              10.7                  38
Inventory Turnover                                  NA              10.4               12.7              12.5                  NA           NA                 NA                 NA
Revenue/Employee                                   $NA        $1,956,663         $2,056,506          $759,039                  83           NA                 NA                 NA
Net Income/Employee                                $NA          $312,265          $164,651            $92,651                  NA           NA                 NA                 NA
                                                                                                                  Company Rank                 HUSA               HUSA              HUSA
Management Effectiveness Ratios (%)              HUSA           Industry             Sector           S&P 500        in Industry        vs. Industry         vs. Sector       vs. S&P 500
Return on Assets for TTM                         (22.8)              (2.2)              3.4                7.4               42
Return on Assets for Past 5 Years                  0.1                6.8              10.7                8.4               58
Return on Investment for TTM                     (23.1)              (2.1)              4.5               10.4               42
Return on Investment for Past 5 Years              0.1                8.2              13.6               12.2               44
Return on Equity for TTM                         (23.3)              (5.4)              6.4               18.4               47
Return on Equity for Past 5 Years                  0.1               14.3              21.7               20.4               45
                                                                                                                    Worst R Best          = Co. underperforming        = Co. outperforming


Financial Strength
Quick Ratio (cash and marketable securities divided by current liabilities) and Current Ratio (all current assets divided by current liabilities) give a sense of how readily the company
could cover current obligations if the sales were to stop. Higher ratios indicate greater liquidity. Different businesses have different cash inflow-outflow characteristics, so compare
companies to industry averages. Similar comparisons are relevant for debt ratios (higher ratios indicate more debt and, hence, more financial risk) and interest coverage (lower
numbers signify greater risk).
                                                                                                                  Company Rank                 HUSA               HUSA              HUSA
                                                 HUSA           Industry             Sector           S&P 500        in Industry        vs. Industry         vs. Sector       vs. S&P 500
Quick Ratio                                      102.9                1.1                1.1               1.4              100
Current Ratio                                    102.9                1.5                1.5               2.0              100
Total Debt to Equity                               0.0               60.2               38.3              70.2               79
Long Term Debt to Equity                           0.0               57.8               35.6              61.6               63
Interest Coverage                                  NA                 5.5                9.3              12.9               NA             NA                 NA                 NA
                                                                                                                    Worst R Best          = Co. underperforming        = Co. outperforming




March 15, 2010                                                                                                                                                                         Page 8

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:1056
posted:3/18/2010
language:English
pages:8