Vermilion Energy Inc T.VET

PEG ratio

[Oldnagger]

One of the more useful measures for Value investors is the P/ E to growth ratio 
I.E. if a stock has a P/E ratio of 10 and a 10% growth in earnings rate then it has a PEG rate of 1.0 and has traditionally been considered fairly valued. 
Well someone decided to throw that measure right out the window. The new religion has been chase the money ( just like a pup chasing his tail ) YET the new religion has led to some very dark corners as wiser investors are just starting to realize. What is the peg for Bitcoin which pays zero interest?
Infinity is the answer.

So what is the current PEG ratio for VET 0.06 is the answer (P/E of 3.4 divided by 54% growth rate over the last 3 years)

So what share price gets us to a PEG ratio of 1.0 ?
Hold on to your beer glass $23/ .06 = $ 383

How crazy is that ? Dunno, I have surely seen a lot crazier the last decade or so !!

VET 23.35 -0.6899 -2.87% : Vermilion Energy Inc - MSN Money

[RevT79]

Yes  it's prety much a daily gamble these days!!! Down 3% on those earning is just plain craziness!!!!

[Ebankbank]

Couldn't agree more, VET has opportunities for the remaining year to have 3/4 of a billion in FCF and what will 2023 look like with no hedges or higher locked in hedges. This trading pattern is baffling?????

[Larrymartin77]

well said, have held VET since $6.50 ... cheers

[CHECKMATE77]

Peg is irrelevant with oil and gas, it's cash flow per share that is the metric to use.

[Oldnagger]

Do the same calculation using the increase in cash flow per share over 3 years. See page 24 of the presentation !! https://www.vermilionenergy.com/files/Vermilion_Energy_-_Corporate_Presentation_-_May_2022.pdf

[Binkie]

Pretty amazing graphs oldnagger, projecting a peer leading $11/share of FCF. crazy number that looks will it will only grow into 2023

[Oldnagger]

This may not sound very sexy , but I reconstruct here the PFCFG ratio as of Fridays Share Pricing  (CAD 24.70) and  the QI 2022 FCF  (including the Corrib Acquisition) of  Cad 4,90 per share) The Q1 2019 FCF was 0.013 per share ( and you divy lovers should take note that it is really important to look beyond the dividend rate !!)  So the annual growth rate for FCF has

[JohnnyDoe]

I kind of have to question any metric or ratio pegging VET at 3500 bucks a share

[Oldnagger]

Well, first of all you have to question every metric , as they all apply to the past rather than the future. Secondly , neither free cash flow or earnings are a perfect measure of profitability and both can be skewed to a certain degree Nevertheless, I was flabbergasted when I first saw the PEG metric published by MSN Money at the same time that they were recommending selling VET. Above all else

[Oldnagger]

To highlite my point VET's current share price is essentially the same as it was in Q1 2029 , in spite of the fact that fcf is now 376 times greater !!

[GregC24]

Future price prediction?   :-)

[Moemoney42]

I think you must mean 2019.. ;-)  I don't think that that projection is very realistic.. but it does point to the undervalued nature of VET. But the market is a fickle lady.. and hard to impress.. :-/

[Oldnagger]

Yes 2019, thx for pointing out the typo 

[Binkie]

Well I'd be happy if it was 2029- but only if it split 7 times and paid half the fcf in dividends...those are some astounding ratios you've uncovered oldnagger. Remarkable that it's basically even over the past 3 years. However it's a 4 bagger over the past year. Don't see that happening again but a double isn't far fetched.