RE:RE:20% of MEG???Not following your math here Z ?
While I dont question your criteria of MEG vs ATH, you conclude that MEG "should be worth 6 times ATH". If that was the case, MEG would be worth $18B (which it is clearly not).
You cant base this exercise on the current trading stock price.
Companies can issue new stock, buyback stock, do a stock split, etc.
You compare it on how the market values them as a whole.
If we look at market cap.....
MEG is $8.2B vs ATH at $3.04B (thats gives MEG an evaluation of 2.7 times more than ATH).
An even more accurate comparison is enterprise value (market cap + debt - cash).
This gives MEG an (ev) of $9.164B (market cap plus $964 net debt).
ATH (ev) is $2.91B ($3.04B - 130M net cash).
This gives MEG an (ev) evalution of 3.15 times of ATH.
Just for an exercise, lets say MEG offered 1 share ($30) for every 5 ATH shares in an all share deal.
That would increase the share float to 272M (current MEG) + 113M new shares to ATH holders.
MEG existing shareholders would own 71%, ATH shareholders 29% of new company.
ztransforms173 wrote: - based on PAST share price HISTORY, the 5 TIMES RATIO (MEG/ATH) was CONSIDERED a FAIR VALUE ASSESSMENT
- HOWEVER, the ATH S/O had GROWN while that of MEG has RECEDED so an ADJUSTMENT is REQUIRED
- based on the SUPERIOR MEG ENERGY COST STRUCTURE and BETTER ACCESS To PREMIUM MARKETS, MEG 'should' be WORTH about 6 TIMES ATH
- you SAY that MEG has MORE DEBT than ATH {which is TRUE on a PER UNIT BASIS} so it should be PENALIZED but the MARKET will NOT LOOK AT IT THIS WAY since the MEG Energy DEBT LOAD is VERY MANAGEABLE
- MEG also OUTCLASSES ATH on COPORATE GOVERNANCE, SKILLED MANAGEMENT and TECHNICAL PROFIENCY
@ 3/14/2024 CLOSE ($):
MEG: 30.35
ATH: 5.26
RATIO: ~ 5.77
- so YES, ATH is SLIGHTLY OVERVALUED versus MEG
ATH {@ MEG FAIR VALUE} : $ 5.06
z173