Stone Energy Corp. (SGY)

We recommend an Outperform rating for Stone Energy (<a href=http://www.zacks.com/stock/quote/sgy>SGY</a>) shares following strong third-quarter 2009 results. Stone has moved away from liquidity management in the first half of 2009 to a disciplined organic growth mode. <p> The Gulf of Mexico (GoM) shelf helped the company deliver a strong quarter, underpinned by both production growth and decreased cost. Last year&#39;s acquisition of Bois d&#39;Arc Energy, a pure-play GoM player, has increased Stone&#39;s footprint in this region. <p> Our favorable view of the stock reflects the company&#39;s improving balance sheet, positive production growth profile, decreasing cost and improved prospects for capital discipline.

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