RE:RE:RE:RE:RE:Precipice of an epic rally Cash- you cant have it both ways as CPG is so higly leveraged that it would be a total mistake to say " cpg was at x and oil was at y. Now that oil is at 2 y, then if cpg gets to 2 x then we should be happy". that is totally, totally wrong given the high leverage that CPG shares have to price of oil as increases accrue directly to the bottom line.
My thesis is that there is a fixed cost of bringing a barrel of oil out of the ground, lets call it $x and lets call the price of oil at $x + say $5 (for argument sake).
If the price of oil is quoted at $x plus $10 then the net to the company should now be $10 so a doubling of net income with an incremental small increase in the price of oil as there are high fixed costs to producing that oil. In this simple example the share price (assuming it was based on 45 net, should double with a very small increase in the price of oil. Of course that is if the markets behave perfectly and are not subject to manipulation and sentiment.
To me I do not see CPG as trading with good investor sentiment and I dont know enough about the company to definitively say there is or there is not any manipulation but heck, this is Canada and we have seen lots of manipulation and other shenanagans so it makes me weary.
Bottom line if invesstors big and small dont have confidence in management then the SP is in trouble and the company will be in trouble until such time that someone comes along and realizes that this would make a great turnaround story....and it gets bought out. Red