RE: Fundamental research
It’s important to keep in mind that all analyst reports are paid for by someone. I always say they should be looked at with a critical eye. What I liked about WPX previous report by Fundamental was that it was well reasoned, assumptions were clear, numbers could be verified and followed reasonably transparent logic.
Remember, most of the information we are using is paid for by WPX, such as FS and Quarterly Reports. Do we think they are a bunch of scoundrels trying to manipulate the stock and steal our money? If so, shouldn’t be buying. But personally, I think the material they have put out is reasonably good. If they pay someone to do market analysis for investors, I have no problem with that. As I read the report, I am going to be asking myself, does it make sense? Are general assertions based in verifiable facts? Are they honest about the risks and the potential? How does this fit with other sources and my own thinking?
BMOs analysis was a problem for me because it defied common sense. How was a serious commitment from the Chinese a bad move for WPX? No, it wasn’t everything in one fell swoop, but maybe our expectations are a little high for this particular kernel of good news. And the comparison with K+S, (an operation with it’s own twisted history), is based on what specifically in either Feasibility Study? Their assessment of essentially, “dump this stinker!” seemed more self serving, knowing that BMO has made a serious investment in KRN in the past.
I read the criticism of WPX but so far, most it seems to have more to do with scooping up potential potash investors for KRN, (or others).