RE:DEBTWhen the share price was last in the $20 to $ 30 range, VET was paying a dividend of $ 0.23 per month. It was this high dividend rate that was supporting the share price. This high dividend rate required 440 million dollars per year in FCF to support it . Investors were lured in by high returns (12 % at $20 ) but turned a blind eye to the dangers inherent in operating witth such a dangerously high payout rate. That cost them very dearly and I doubt those investors will ever return.
Now we are left with a company that is still a very good company operationally, but this time it will be a much safer investment as the company strengthens the balance sheet then keeps it that way.
I can certainly understand the frustration of any one who bought over $20. I was one of them. But I made up for that frustration by buying more at a much lower price. I would never have bought more without first assessing the true worth of this company based on its assets and its prospects.
Turns out I was right on my reassessment. So I will sit quietly and wait for share values to rise.
with the former 12 % dividend it would have taken 6 years to double my investment (rule of 72) (and even longer if the dividends are taxable)
With the current share price and FCF of 400 million dollars I calculate a return of 36% per year which will require 2 years to double my investment (rule of 72 again). Conversely if I still would be happy to double my money in 6 years then VET needs a FCF of 400/3 = 133 per year
So everyone get out those slide rulers and make your own decision .I certainly have made mine !!