Spyglass Resources Corp SGLRF

RE:SGL – the best case scenario 12 months from now

[sanityseeker]

Proud Canadian2 - last year you could have bought a sound company like Suncor with massive reserves that don't need to be found or proven, very strong cash flow and sound management at 10 times earnings.

That aside, the low valuation of SGL is, I think, easily explained by the stretched balance sheet, exacerbated by managements irresponsible dividend policy. Given the uncertainty inherent in commodity business, high debt levels relative to cash flow  can make a company quite speculative. Don't underestimate the degree to which the market punishes imprudent management in this regard.

I agree there is a lot of underlying value here, but management seems not to be committed to making certain such value can be realized. Deploying cash in the business or to repay debt would be a much more prudent course than maintaining current DVD yield.

Unfortunately, many here would advocate reducing value by maintaining DVD yield,  so that they can more easily justify their accrued losses on their sgl investment. Time to look forward, not back.