In At The Close was hoping on a bit of retracement .
TD Investment Conclusion
In our view, Legacy’s 2013 reserve report underscores the improvements in the company’s operating
efficiencies, which include enhanced well performance
and cost reductions across core plays. Improved
execution, coupled with our belief that management is focused on improving its financial flexibility, lead us to
believe that Legacy could eventually adopt a dividend-based model. Based on our 2014 estimates, Legacy is
on track to post the lowest annual corporate cash flow payout on record at 99%, while showing year-over-year
growth of 12% (8% per debt-adjusted share). We reiterate our BUY rating and our $8.00/share target price.