RE:RE:RE:RE:RE:RE:RE:RE:Share Price Punished?stockmarket1 wrote: All good on paper but, will it get to $100? That is the question.
JohnnyDoe wrote: Oldnagger wrote:
EnergyWatcher55 wrote: Can you explain what you mean that VET is paying $11 per year in FCF for a $30 per share?
FCF or free cash flow is what is left over after sufficient cash has been used as Capex to sustain production. It can be used either to grow the company or to pay down corporate debt or return it to the shareholder by way of buybacks or dividends.
Think of it as a business that you can buy for 30 thousand dollars and will pay you back 11 thousand dollars each year , most likely for ever. Well that is the way I look at it anyway. Many others have different opinions. Up to you to make your own opinion !!
agreed. That's how I look at it. Mgmt is likely to lean heavily towards buybacks until the share price is more reflective of actual value.
11 fcf/share is a ridiculous number. If they mostly buyback shares from now through 2023 and then go into 2024 and flip to 50% fcf dividend, they can pay out 5.50 a share in 2024. Yielding 5%, that suggests a share price >100.
That's why we're all here isn't it? I own a handful of mid caps and I see a clear path to a minimum double on all of them if oil spends the next few years at 90 or better. There's just too much cash flow. Maybe Vermilion, due to its international presence, grows production outside of Canada or looks for acquisitions outside Canada, but for those in Canada, growth at all costs is history. The takeaway capacity is finite and it cuts into margins if too much oil is being pumped. A lesson I think the industry has learned.
modest growth is what we need, stable pricing, and healthy returns.