GREY:WFREF - Post by User
Comment by
wilwalon May 22, 2015 5:33pm
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Post# 23756194
RE:Long Run vs. Spartan Energy
RE:Long Run vs. Spartan EnergyI think it's pretty simple and the answer is right in your post: it's the debt.
Talking heads have been yakking for 6 months now about how the high debt ratio oil companies aren't going to survive so the market has pummelled every one of them......and Long Run is no exception. This company is viewed like an individual who has maxed out all their credit cards. Just look at the debenture prices and you will see a 40% discount indicating what the creditors think of LRE......risky. The sooner the debt is resolved and LRE repositions itself to grow again, the sooner the market will love it once more. Right now, they are viewed as high risk because a fallback in oil prices could trigger debt covenants and they will be in big trouble scrambling to find cash.
All that means there is a big opportunity here. Hopefully management is smart enough to figure this out. Almost every single insider added LRE shares to their holdings in December and January, so I would say they are confident......although their confidence doesn't guarantee that they are going to fix the problem.......let's hope so.