Painted Pony Pete Ltd PDPYF

RE:RE:RE:RE:RE:RE:RE:Pony cash costs 2017E and 2018E

[dalerules88]

you're right; but problem with GAAP is that it's BS, it's basically irrrelevant in these markets;

GAAP functions off book value, and book value is such a maleable concept, that you have to dig down to the actual assets to assess if the BV makes any sense; that's why the industry focuses on FFO, FCF and all these cash-based measures;

all that GAAP money is long gone and you're just amortizing it; it matters in a very very long term perspective (let's talk project lifecycles) but in the short-term commodity market response-type management decisions, it's basically irrelevant;

PEY trades at 1.4x book while TOU trades at something like 0.8x book - does that make PEY almost twice as "expensive" as TOU, and therefore overpriced? Of course not. It all depends on who bought what property and when in the commodity cycle. It affects paper profitability, of course, but that's just it - it's only a paper number. In this volatile market, cash is king, and so cash costs is what matters when it comes to survival of these down cycles.

If we have a prolonged downcycle, then TOU will have as much trouble as Pony, be it perhaps bit less than PEY, because of PEY's relatively high debt/equity ratio. But in what is likely to be about a one-to-two year downturn, if that, the non-cash metrics are only useful to scare investors out of their shares (just as they are to entice investors to buy at the top of a run)

IMO