Why is there no issuer bid??????????Eagle's $30 mil market cap isn't that much higher than their yearly G&A,only around 3 X.
Tourmaline's is ~ 300 X and Peyto's is ~ 750 X.
A low ratio could also mean the company is undervalued.True, but If that were the
case here, wouldn't an issuer bid have been deployed long ago (traded under $1
for last 5 months). Not much if any insider buying either.
Obviously the insiders seem to think the shares aren't undervalued.
Let's see, Eagle's EV/flowing ~$26,000,EV/reserves ~$5,P/NAV < 0.2,
it has low decline rates,mostly light oil production,high field netbacks and
reasonable debt.With metrics like that,wouldn't you be buying back,
I sure would.A dividend payer has even more incentive to buy back,
since every share canceled is one less dividend payable/month forever.
Over the life of a company,that could add up to a considerable amount of savings.
Buying back shares also increases NAV/sh.Issuer bids are limited to 10% of the
outstanding shares,but for demo purposes I'm going to use 50% to
help show bang for the $.Suppose Eagle wants to double the NAV/sh.
That would require the NAV to increase by ~$180 mil without adding any new shares.
Good luck is right.If it were possible to buy back half the shares,wouldn't that
double the NAV/sh? Yes,quite close, depending on the price paid.If they were able
to do it at the current price ($0.71), it would only cost ~$15 mil.How's that for bang.
~$15 mil would almost double NAV/sh vs ~$180 mil from ????????
It would also technically double earnings,CF, and dividends/sh.
For every $1 spent buying back at $0.71/sh,a min ~$5.50 of value is created.
How many companies can beat that with drilling or anything else?
Is it any wonder most undervalued companies don't hesitate to buy back.
Eagle is severely undervalued,yet has no issuer bid??????????
Please everyone, let Eagle know we're not impressed with their lack of an issuer bid.