By: Bill Powers
Valuing public companies is a black art.
Analysts use many metrics, and when delivering a final price target on a stock, use the average of several methods—cash flow multiple, Net Asset Value and the esoteric “management premium”.
But I want to suggest to investors that right now, one of...
Many small exploration and production (E&P) companies could still be worthless even if oil prices rise next year according to RBC Capital Markets. RBC’s recent energy note—Surviving The Downdraft--looked at the prospects for 29 US and Canadian small cap stocks.
They are what I call The Zombie Stocks—The Walking Dead. ...
I'm off to Dubai for a week of meetings, but I want to leave you with some ideas that should leave you...questioning...The Bear Case on oil.
I want to be clear...I'm not a perma-bull on oil. Far from it. I'm an investor, and a trader, looking for a trend. Energy...
To me, the Market (Dow/S&P 500) is a bit of a binary trade right now. It’s pretty clear to me that the Market is determined to retest its late August lows. If it bounces, I think I can safely buy stocks and likely add to my biggest position again...
Oil and gas producers are among the least profitable sectors in the energy world—yet they gain the most attention.
And they’re cyclical—you have to trade them. They had a great two year run from 2009-2011, then were the wrong place to be for two years, but the Polar Vortex of...
When I saw this energy company, I couldn’t believe it. Here is a company with:
no long term debt
$30 million cash
growing EBITDA (cash flow)
When I rushed out to buy the stock, it was paying me a double digit yield.
That’s right—over 10%--on a payout ratio of under 60%.
And trading at just...
This week the EIA released the first look at its new method for reporting United States crude oil production.
It revealed two things.
First, the EIA’s prior method had been significantly overstating U.S. oil production so far in 2015.
Second, U.S. production appears to have started declining back in April. This is...
Is it time for investors to load up on oil shares--or time to sell? The answer is--it depends what metric you're looking at. On a cash flow basis, they're expensive. But based on Net Asset Valuations (NAV), they're cheap. How can oil stocks be both expensive and cheap? I'll...