RE:RE:RE:RE:RE:RE:RE:Still under $1 Keep in mind the market is forward looking AND also ATH is getting ZERO value for having no geopolitical risk and world class reserve life.
As it is the stock is trading as if WTi is trading @ $60.
M&A imminent and ATH will be front and center.
Last time I held an energy stock valued so cheaply was Hurricane Hydrocarbons when it paid a special $4/share dividend when the SP was $8.It proceeded to go well north of $30 and got bought out.
quote=Chris007]Assuming they can lower net debt this year by around $100m and WTI averages at 70 (without them having hedged the majority of it at a much lower price)
70 - 43 (cash flow break even) = 27
*each $5 increment in WTI above 43 generating 70M in cash flow*
27/5 = 5.4
5.4 x 70 = 378M
378M x 4x EV/CF multiple (3-4x typical of energy small caps, large caps trade around 5-6x) = 1,512M
1,512M - 319M net debt = 1,193M
1,193M/ 531M shares outstanding = $2.25/share
That being said, plenty of caveats...will the market actually bid the EV/CF multiple to 4x?(currently its trading approx 2.5x based on unhedged cash flows)...are oil prices sustainable at current levels into next year, without bringing online, new production into the market? what will year end net debt actually end up being (with 60% of current ATH production hedged at around the mid 50s)?
Nothingmatters wrote: Yes atleast $2 for sure. Or above. This is my prognosis.
CandyC wrote: Nothingmatters wrote: Obviously oil has to stay above $70 for quiet some time for it to be $4 stock. ATH is the most undervalued. Momentum is with oil. Tend is your friend. Imo glta
CandyC wrote: Chris007 wrote: LOL. Even among prognosticators, there are two different types…
There are those that believe the stock should trade higher due to the fact that the stock’s intrinsic value is higher than the current market price. Whether you come to this conclusion via relative valuation using peer multiples or discounted cash flow…atleast these guys base their predictions on fact/data…if they can explain why they think the share price should be higher and their target price, while providing their work, that’s all good my opinion. That being said, anyone that actually bothers to do this, will also recognize the fact that the market can stay irrational longer than you can remain solvent, not to mention the fact it could also just be that your own assumptions are actually wrong.
The other group are those that just pull random prognostications out of their a sses ….back when oil was in the mid 40s, they would say stupid shi t like, “this is going to be a $3 stock the second oil touches $60”…now that oil is the 70s….”this is going to be $4 in a couple of months” or other random useless quips like that.
For the first group, I have zero problem with such people, because it’s definitely a possibility they are wrong, but atleast they put some work into their analysis. The other group don’t add anything of value, and in my books, brainless pumping is just as bad as brainless bashing.
x4n2t0x wrote: What happened to the prognosticators?
that's exactly me. Lol. I'm pumping. I am somewhat new to investing but I know very little. I do PVR BNN and CNBC and watch most analysts. Most think oil is going to $100 or just trade between 80-100 for several years. Eric Nuttal's analysis seems understandable out of every analyst I watch. Most of us are not experts and I put myself at the very bottom of it. I just listen to what they have to say and go with the momentum. Of course they could be wrong but I'm betting they are not.
I'm thinking of two quarters above $70 WTI for Athabasca to be above $3. What are your thoughts?
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