- Speculation ended last night as Pacific Rubiales is being bought at around $6 CAD per share.
- This offer is at the low end of the valuation I discussed in my previous article.
- With the oil market slowly recovering, I would expect better returns holding on to the stock for the longer term instead of letting go at this price.
TransGlobe Energy had a great run in the past month, following my articles on Seeking Alpha. However, on a technical point of view, you should expect a short-term pullback. As such, I believe it is time to sell the stock and buy it back in the short-term afterwards.
Indeed, it seems that the stock couldn’t break the C$5.40 mark. Furthermore, the MACD is about to cross downward. The stock might test the 200-day moving average again in the short-term.
Disclosure: I am long TGL.
- PRE is undervalued compared to its peers.
- The shares are worth over $6.50 based on the net oil reserves of the company.
- The shares are worth over $25.50 based on the net oil production of the company.
- Oil sales from the first quarter will be around $786MM.
- PRE will have a positive cash balance for the first quarter on lower capital expenditures.
- There won’t be any debt maturing before the fourth quarter of 2016 with the new debt profile of the company.
- PRE will increase its cash position by taking on more debt.
- SNC will try as much as possible to settle the fraud charges out of court.
- SNC is more dependent on the commodities cycle and the Canadian economy compared to WSP.
- The 407 Highway is worth up to $20 per share.
- Valuation compared to peers points to major upside.
- The management team is prudent and of high quality, and is a great value creator for shareholders.
- The plan to buy back 10% of the public float will provide a floor and boost the share price.
- There have been fundamental changes in the way TGA can do its business and it will clearly benefit shareholders.
- The management team is willing to look for potential M&A opportunities with high level of cash and a pristine balance sheet.
- Intense insider buying and the share buyback will provide a strong floor for the share price.
- The Highway 407 concession in Ontario is a highly valuable asset, and the sale could raise cash for another acquisition.
- There are still great headwinds that remains in the core engineering and construction operations of the company.
- TGA has a pristine balance sheet, with very low debt and high levels of cash and assets.
- New government in place in Egypt is pro-business and favorable to foreign investors.
- Discounted cash flow indicate a value of $6.81 per share, or more than 100% upside.
- Net assets and oil reserves indicate a value of $10.77 per share, or more than 225% upside.
- The 6% dividend is a nice bonus to help you wait until the market realize the tremendous value in TGA.
- The financing costs for 2015 have come down to $235MM.
- Realized price are higher than the WTI spot price.
- Aggressive hedging strategy (60% of production) will minimize liquidity risks in 2015.
- PEGFF needs a Brent price of under 40$/bbl to run out of cash.
- From now on, with bankruptcy out the question, any news will be good news.
- The world oil market will be over supplied by over 1.2 million barrels a day in 2015.
- The world demand growth for oil in non-OECD countries will be strong in 2015.
- The US oil production is still expected to grow in 2015.
- Oil market fundamentals such as US production and demand will need to change before calling the bottom.