RE:RE:RE:Auburn2 / Adonis1411First, total current assets takes care of almost all company liabilities, and a big portion of those liabilities are lease liabilities: $17 million. Therefore, I differ on your enterprise value computation though I'm aware all different people have different ways of calculating that metric. Second, and more importantly, see this release:
https://cathedralenergyservices.mediaroom.com/index.php?s=3426&item=135106 Three months ended March 31, 2017 shows EBITDAS generation of $7 million. Annaluze that (X4) and that's $28 million. At a 5X multiple, that's an enterprise value of $140 million.
At that EBITDAS, debt will quickly fall to zero and the already strong balance sheet will have a surplus of current assets against total company liabilities, so the enterprise vavlue will be less than the market cap. Therefore, at your 5X EBITDA metric, $2 won't be a sufficient share price, but rather $2.80.
The best Permian acreage has been drilled, aggressive declines are kicking in, and the next drilling boom will dwarf the last one. Why do you think Wilks bought those $1.71 shares? He was early, but billionaires can afford to be early.
Rarely do you get the opportunity to buy into so strong a company with a market cap of under $10 milion. Why is that significant? Because of how money and math work. Simply, the leverage is extraodinary, yet it's not high-risk debt leverage as often is the case when investors are seeking these kinds of returns.
I hold ESN and HWO as well, and I love both names because of their extraordinarily strong financial positions, but CET has superior leverage.