Whitecap Resources Inc T.WCP

RE:RE:RE:RE:RE:Too many shares

[Moemoney42]

Moemoney42 wrote:

WINDGOD46 wrote: Noone wants a dilution of a stock;from the the P/E ratio this is evident. WCP has a P/E ratio of 5.6, meaning in plain terms you need 5.6 dollars to deploy in order to make one dollar. On this metric CPG has a P/E ratio 1.5, much better than WCP. yet only the P/E ratio is misleading to evaluate a co. because in the P/E it does not show the long term debt of a co. And though CPG has less shares outstanding, because of its larger debt, its valuation is lower. And since there is talk everyday of inflation and the need to raise  interest rates, priority should be given to the debt reduction. And the management has got this right and are focusing on debt reduction mostly. high costs can eat into the profits and its P/E ratio. At the same time they must give its shareholders some incentive to stick around hence the Div. increase is a must. It'sa balancing act they have to  perform.

You would be wrong in that hilited assumption.. the P/E is ratio of a company's share price in relationship to the earnings per share... the P/E will rise if investors feel the company will increase its earnings at some point in the future.. has nothing to do with investing X dollars to earn 1 dollar..! IE: if a company has earnings of $1/share and a P/E of 5, the share price would be $5, if that same company earned $1/share but had a P/E of 10 its share price would be $10/sh.. no relevancy to how many dollars it takes to earn that dollar/share.. :-/

THEREFORE
CPG - EPS of $3.63 x P/E of 1.25 = a share price of $4.53
WCP - EPS of $.91 x P/E of 5.93 = a share price of $5.39
NOW... if CPG were to garnish a P/E similar to WCP, CPG's share price would be $21.52 that's why I feel CPG has more torque to the upside at some point in the future, although I own both CPG is my biggest holding for that reason alone.. good luck.. ;-)