After big loss since Q2, share price is at best entry pointSomebody said Spartan does not have the cash to buyback shares and its debt is too high. Through time, people becomes forgetfulLet us talk about some facts.
1. Total liability 270, shareholder equity 1.34b, total asset 1.85b. Liability to equity ratio 20%, liability to asset ratio less than 15%. Is this high? No.
2. Book value: > 7.6 per share.
3. Cash flow: 95m for H1 and 45m for Q2, 190m annually. Very strong cash flow generating capacity.
4. Net debt 233m. Debt to cash flow debt ratio: 1.23. Not high.
Q2 loss of near 10m due to lower oil price, but it is temporary. Given all factors above, share price is badly undervalued.
Spartan has sufficient cash for plan share buy back: maximum 8.8m for a year. Based on current SP, it will cost 45m maximum. It does not need to buy that much. If it starts to buyback shares, a small amount every day for example, 200k, will trigger short recovery and quickly boost share price!