GREY:LSTMF - Post by User
Comment by
Corrigan1on Sep 27, 2011 12:48am
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Post# 19087124
RE: What Would You Pay For A Flowing Barrel Of Oil
RE: What Would You Pay For A Flowing Barrel Of OilFundamentals seem to have been pushed aside in the current market as evidenced by the following excerpt from the TD Waterhouse Intermediate Oil and Gas Weekly. (published September 26). The highlighting is mine:
There are two themes from the last week. One – companies that sold down the
most were those with a combination of low-growth and/or leveraged balance
sheets (NVA, DAY, NAE, PBN, and AAV) or above-average operational risk
(CR). Two – dividends matter (if they can reasonably be expected to be
maintained). We have previously questioned the capacity for some companies
(DAY, PBN, and PMT) to maintain current dividend and/or capex levels.
Valuation is not a driving consideration – the names most negatively affected in
the last week typically already traded at discount valuations to the peer group.
I'm still holding DAY and NAE and have taken a bath on both but I am not long PBN at the moment. I bailed a while back and had planned to buy back in when the share price stabilized. Not sure how much longer investors are planning to punish PBN but the decline certainly seems overdone.