Replies to post #1024 on Global Value Investing

[Jman9000]

Rato,

There are reasons it has dropped....is Thai as good as advertised? It doesn't appear so. However, when you have a levered company that has debt, those are the 1st to tank....why not the upside today...likely because the uncertaintly isnt gone. The ones to pile in first are the ones with cleaner balance sheets.

I'm not in PBN right now, I'm just saying I can see the reason for the decline and I don't think it has anytihng to do with a scam or whatever allegations you were making.

Here is an energy stock I am in that has gotten hammered even harder... SLG.V....over 75% decline from highs.....there were legit reasons, sure, but I think it will come back a long way too, so in.

What about ATPG? ANother company beaten down because of debt concerns from $18 in May to ~$8.

Or PEC.V....trading near cash from ~$1 to <$0.30.

I think you're a smart guy, but almost too smart for your own good. You overgeneralize and oversimplify and think you know the story based on price action when all you do is miss the opportunities in front of you. Maybe you got burned in the past, that's fine...if you don't want to invest, go ahead and stay on the sidelines. However, the way you think you know everything can be hard to take. I'm not saying that PBN is the one stock to own, but rather that if you want to find gems, you need to do a whole lot more than your cursary review and jump to conclusions with very little DD. Again, these aren't all necessarily the best plays just yet, but they don't appear to have any sign of scammy and have been pummelled none the less because of global economic concerns and more perceived risk than others.

There is often little correlation between fear and value.

Jer

[2morrowsGains]

PBG.to(PBEGF), PBN.to(PBKEF)...Here's your rational, compelling explanation for the consistently horrific price action in PBG/PBN...

The first part of 2010 Petrobakken made a couple acquisitions (Cardium) while ramping up drilling. Interest in the stock dwindled. From June 2010 to March the stock price just plugged along at approx $22 a share. In March 2011 when Petrobakken reported FY2010 Q4, production came in lighter than expected due to holding back on fracking while waitng on a new technology. The market was disappointed and the stock dropped. Q1 results rolled around and prodution showed a decent improvement, however, management warned Q2 production would be lower due to a possible longer than expected spring breakup. So the interest in Petrobakken continued to dwindle and shorts added to their positions. Then came the rains! That really hurt production and Q2 results showed it. Then came the drop in oil prices. Debt became the focus and shorts added again to their positions. That along w/ panic selling put us where we're trading @ today, in the $6's.

Petrobank (PBG.to) followed Petrobakken down due to their 59% ownership in the company. (The delay's in THAI have also been an issue, but IMO most of Petrobank's drop was due to Petrobakken's drop).

So there you have it.
ratobranco, anyone who stuck things out with these 2 companies have no doubt taken a beating. But now is not the time to throw in the towel IMO. They look better than ever IF oil doesn't collapse. Petrobakken has been cranking up prodution at a good clip for 3 months now and will be close to record production when they report Q3.
Petrobank is trading at their heavy oil asset value.
Unless I'm missing something, at C$6.50 a share and lower, risk has just about been abolished for Petrobank shareholders and you're getting ownership in Petrobakken & THAI for next to nothing.
The price of oil & Perobakken's debt are definitely factors going forward, but at current prices, I think Petrobank's reward way outweighs the risk. Time will tell.
Petrobakken carries more risk at this point, but even then, as long as oil prices don't crash and stay there, and with a few adjustments, there's a good chance they can pull this off.
No matter what, things are going to be very interesting for both these companies going forward.
We'll see what happens.
Just my opinion.