Cathedral Energy Services Ltd CETEF

Continued strength by TCW and PHX

[auburn2]

If I were at the helm of TCW, I would seriously consider acquiring CET through issuance of shares, though they could do it as well through cash on the books.

[auburn2]

These companies continue to hold up much better. PHX is a more direct comparable.

[auburn2]

Edit - the more debt leveraged PHX was crushed harder and beyond reason in March, and the CEO even sold a large position that seemed to make no sense. It's simply rebounded meaningfully since that irrational selling. I never did get an answer about why the PHX CEO was selling so much at the bottom.

[auburn2]

Actually was wrong about PHX being debt-leveraged. The latest financials look really clean with no-long-term debt. Total equity is $144 million. CET's total equity is at $54 million in the latest financials. I like both, but no longer hold a PHX position.

[auburn2]

So on that equity metric for CET to be trading at half its shareholders' equity like PHX it, it would have to appreciate in price 4.5X from a market cap of $6 million to $27 million. This could be a silly comparison if CET's balance sheet were weak or debt was high, but neither is the case, and shareholders' equity will increase a lot if we get a good market and impairments are