OTCQX:GXOCF - Post by User
Comment by
Roland22on Apr 14, 2015 10:02am
181 Views
Post# 23626825
RE:TD drops price target from $10.00 to $8.50
RE:TD drops price target from $10.00 to $8.50I reviewed their analysis and it seems a bit flawed to me.
TD states that the average junior divco trades @ 6.8 x EV/DACF and the average non-divco junior trades @ 7.2 x EV/DACF, yet they are using a 6.5 x EV/DACF for their valuation.
They provide no explanation as to why they think Granite/Boulder should trade at a discount to the rest of the E&P junior universe.
Using the average multiples from TD's analysis, the valuation chart from exhibit 2 of the TD write-up would indicate an appropriate valuation of > $10/share.
If you think Granite/Boulder deserve a premium valuation relative to the junior E&P universe due to Boulder's superior growth prospects and Granite's ability to pay a divvy and grow modestly all within cash flow at existing strip prices, the valuation gets significantly higher.
GLTA
Roland