GREY:BNPUF - Post by User
Comment by
rsmerchion Apr 12, 2018 7:04am
148 Views
Post# 27871463
RE:BNP looks Good for Value.Patience.
RE:BNP looks Good for Value.Patience.The debt level will normalize over the next three years. Then, you will see a reversion to mean for the stock value. For example, Birchcliff produces the sames barrels of energy with an even high natural gas bias. Yet, Birchcliffs market value is 3 times Bonavista. BIR is 3.5 times cash flow per share, while BNP is 1.2 cash flow per shares. The ratio to EBITDA is a similar discount. So, if the debt can be paired down over the next few years, the stock should triple. As management owns 10% of the company, and have chosen to reduce capital expenditures to paydown debt, this seems to be their strategy. I like it. Plus, in 3-years natural gas prices should also stabilize, as identical products cannot sell for widely different prices indefinitely. Eventually, private equity will figure out how the arbitrage.