Discount to bookCPG trades at 0.6x book and is continuing to trend lower.
The last time I saw a stock’s book value deteriorate so rapidly was with LTS, and we know how that ended.
CPG is not in any danger of becoming insolvent, so it is rather perplexing that it would trade at such a large discount to NAV.
The market is telling us that there are dark days ahead for CPG, but I find that hard to believe. WTI is at $67, and the forward strip is above $60 well into the future.
At $60, CPG is comfortably solvent, so what explains this disconnect?
Could it be an amazing opportunity or a trap? I’m still undecided.
I have made and lost tremendous amounts of money with similar stocks. With the ones that I did well on, the catalyst invariably was a change in management. I doubled my money with Valeant once Pearson was removed and Papa brought in (I bought once Papa had seemingly stabilized Valeant).
My hope with CPG lies with new management, so I am eager to hear from him/then.
If it is more of the same, I will cut my huge losses and sell my remaining shares.