Replies to post #881 on Global Value Investing

[ratobranco]

PBN/PBG - I saw this and thought very deeply about going long/short PBG/PBN. I decided against it based on the 10% dividend + interest I would have to pay. The market can maintain an irrational disparity between these two stocks for a very long period of time, and there is no guarantee that the 10% yield that goes into PBG's balance sheet will get reflected in the disparity. It obviously hasn't been reflected so far, if you look back a year or so.

I am also concerned about getting squeezed in PBN, given the excessive short interest.

To be honest, I thought the earnings report sucked. They missed the already-lowered production estimates from analysts (Credit Suisse, their ally, lowered the estimate to 38,000 and they missed even that number). This is the 3rd straight miss in a row. I think the market is starting to doubt the quality of their reserves.

[2morrowsGains]

PBG.to/PBEGF, PBN.to/PBKEF...The price of oil is firming up a notch and it's looking like both Petrobank & Petrobakken were / are excellent buys this week. If oil remains at or around $85 I'm thinking Petrobakken will not cut the dividend (but you never know). Cash flow should be very strong from here on out through the end of the year.
PBN's current dividend yield = 8.98% based on CDN$10.69.
Looking forward to a THAI update which should be out by no later than Monday night.

BTW, at this point, PBN has been beat down soooooo much (and PBG has folowed), even if the divi were sliced, Petrobakken / Petrobank are still waaaaaay undervalued (IMO).
We'll see what happens.