What am I missing about Petrominerales?

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What am I missing about Petrominerales?

Postby Butler » 13 Jan 2012 17:03

This is an oil play, and as such it's been down heavily, about as bad as RIM, in fact, dropping from above $40 last January to $15 before rebounding a little. Earnings per share are $4.43, which sounds pretty darn good to me. P/E ratio is 4.12 which is also damned good. I realize oil is iffy in the short term, but over the long term, it's hard to see how this can miss. Does anyone have an opinion? This oil is in Columbia. Would it make more sense to go with something like Husky or Suncor?
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Re: What am I missing about Petrominerales?

Postby adrian2 » 13 Jan 2012 23:09

Another former Sprott favourite bites the dust?
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Re: What am I missing about Petrominerales?

Postby newguy » 14 Jan 2012 01:03

IIRC there was lots of hype about the thai process and it doesn't seem to work as well as advertised. Shocking.

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Re: What am I missing about Petrominerales?

Postby AMABILE » 23 Jun 2012 14:53

Would you buy PMG now ? 52 wk low....4.3% divy ?
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Re: What am I missing about Petrominerales?

Postby max88 » 16 Jul 2013 17:44

Excited to see the DRIP'ed shares in the account. Then puzzled at DRIP price of $6.636222, or "Average Market Price" of $6.985497 before %5 discount.

According to the company's Share Dividend Plan,
...
"Average Market Price" in respect of a particular Dividend payment date, refers to the arithmetic average (calculated to six decimal places) calculated by dividing the total value of Shares traded on the TSX by the total volume of Shares traded on the TSX over the five trading day period immediately prior to the payment date of the applicable share dividend on the Shares.
...


http://www.petrominerales.com/files/417.Share%20Dividend%20Plan%20-%20June%202013.pdf

Payment date is July 15, 2013, the five trading days prior are July 8,9,10,11,12. The price has never been above $6.70 in those five trading days.

Did I misunderstand the "Average Market Price"?
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Re: What am I missing about Petrominerales?

Postby Justise » 17 Jul 2013 11:09

Butler wrote:This is an oil play, and as such it's been down heavily, about as bad as RIM, in fact, dropping from above $40 last January to $15 before rebounding a little. Earnings per share are $4.43, which sounds pretty darn good to me. P/E ratio is 4.12 which is also damned good. I realize oil is iffy in the short term, but over the long term, it's hard to see how this can miss. Does anyone have an opinion? This oil is in Columbia. Would it make more sense to go with something like Husky or Suncor?



There are some 6 positive points on this stock.

This website - http://www.forbes.com/sites/dividendcha ... r=yahootix - from forbes' dividend channel provided 2 strong points namely [1] P/B about 0.5 and [2] high dividend yields and also infers [3] dividend seems safe.

[4] Very strong free cash flow as compare to the all others and therefore also implies that the dividend is safe.

[5] The fact that the stock came down from over $40 per share means that almost all the 'unlucky' factors were aligned to have such a drastic drop. The reverse can happen again as in the case of the rise to over $40 previously and even if the retracement is 50% meaning the stock can climb to around $23 per share. At least now oil price and seasonality are in its favour for the near future.

[6] The fact that P/B is around 0.5 and large exploration acreage rights, it is a very attractive take-over target for the major oil companies.


Therefore on the risk/reward metrics, I bought into this stock also for the safe high yield.
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Re: What am I missing about Petrominerales?

Postby max88 » 18 Jul 2013 21:45

max88 wrote:Excited to see the DRIP'ed shares in the account. Then puzzled at DRIP price of $6.636222, or "Average Market Price" of $6.985497 before %5 discount.
...
...
Did I misunderstand the "Average Market Price"?


I emailed Petrominerales Investor Relations. They replied with $6.150732 as the price of new shares issued share dividends on payment date July 15, 2013.

I think I know where I messed up. I called TDWH to setup DRIP, instead of filled out a Share Dividends Plan form and sent to Petrominerales. TDWH might have DRIP'ed at market close price of $6.63. I will call TDWH to inquire, and fix (cancel TDWH DRIP and setup SDP).
I am cautiously optimistic. When it goes up, I claim I have been optimistic; when it goes down, I claim I have been cautious.
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Re: What am I missing about Petrominerales?

Postby Justise » 17 Sep 2013 17:15

Butler wrote:This is an oil play, and as such it's been down heavily, about as bad as RIM, in fact, dropping from above $40 last January to $15 before rebounding a little. Earnings per share are $4.43, which sounds pretty darn good to me. P/E ratio is 4.12 which is also damned good. I realize oil is iffy in the short term, but over the long term, it's hard to see how this can miss. Does anyone have an opinion? This oil is in Columbia. Would it make more sense to go with something like Husky or Suncor?




I am up by about 30% excluding the fat dividend in less than 6 months. Took some profit and let the rest ride with about 9.3% yield.
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Re: What am I missing about Petrominerales?

Postby max88 » 27 Sep 2013 15:57

Justise wrote:I am up by about 30% excluding the fat dividend in less than 6 months. Took some profit and let the rest ride with about 9.3% yield.

More upside.

http://www.bloomberg.com/news/2013-09-2 ... alted.html
Petrominerales, based in Calgary, surged 18 percent to 15,780 pesos at 12:21 p.m. in Bogota before the stock was suspended. Pacific Rubiales, the world’s fastest-growing major crude producer, fell 2.7 percent to 38,760 pesos.
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Re: What am I missing about Petrominerales?

Postby Peculiar_Investor » 29 Sep 2013 22:46

The other shoe has dropped, Pacific Rubiales Agrees to Buy Petrominerales for $907 Million - Bloomberg
Bloomberg wrote:Petrominerales shareholders will receive C$11 a share in cash and one share in a newly formed exploration and production company, Bogata-based Pacific Rubiales said yesterday in a statement. That’s 42 percent more than the Calgary-based company’s last traded price of C$7.74.
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Re: What am I missing about Petrominerales?

Postby max88 » 30 Sep 2013 21:45

Sold PMG within 1 minute of market open. Doubled my money in less than 4 months. All in TFSA account. Thank you berry much.
I am cautiously optimistic. When it goes up, I claim I have been optimistic; when it goes down, I claim I have been cautious.
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Re: What am I missing about Petrominerales?

Postby adrian2 » 01 Oct 2013 10:31

max88 wrote:Thank you berry much.

But not black berry much! :P
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Re: What am I missing about Petrominerales?

Postby max88 » 01 Oct 2013 18:43

adrian2 wrote:
max88 wrote:Thank you berry much.

But not black berry much! :P

:) Gain from pmg was many times my loss on bberry.

Just lucky I guess.

$12+ was better than $11+new share on my book. If the deal does not finalize I will consider a position again.
I am cautiously optimistic. When it goes up, I claim I have been optimistic; when it goes down, I claim I have been cautious.
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Re: What am I missing about Petrominerales?

Postby Justise » 05 Oct 2013 23:08

max88 wrote:
adrian2 wrote:
max88 wrote:Thank you berry much.

But not black berry much! :P

:) Gain from pmg was many times my loss on bberry.

Just lucky I guess.

$12+ was better than $11+new share on my book. If the deal does not finalize I will consider a position again.




The fact that this stock was trading at $40+ a share mean that all the stars were aligned then, and when it was trading at lows of $5+ means that all the stars were misaligned particularly when all the analysts were pushing the sell button recommendation, it was then a great buying opportunity for the value and yield investors particularly those who bother to open the hood to check the fundamentals. Also the fact that it was trading at half its NAV, it was a great takeover target as one of my prediction possible outcome. At $12 it is about its NAV. But how do you value the big acreage concessions? The takeover is supposed to have a stronger financial backing to get its full potential which if I were to conservatively estimate 50% retracement, the stock will be worth around $23. Therefore, I think $11 cash/share + 1 share will be much better than $12/share profit taking. On the basis of this, I am not selling.
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Re: What am I missing about Petrominerales?

Postby Justise » 05 Oct 2013 23:24

From the time of announcement to now, the total volume of trading is probably around 20 million shares meaning over $200 million changing hands. Those over $200 million buyers are probably thinking the way I think and so is the takeover company. All the selling analysts lost their creditability and the short sellers will have to bit the bullets. It pays to look under the hood and think analytically against all those sell analysts. :thumbsup:
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Re: What am I missing about Petrominerales?

Postby max88 » 06 Oct 2013 11:14

Justise wrote:The fact that this stock was trading at $40+ a share mean that all the stars were aligned then, and when it was trading at lows of $5+ means that all the stars were misaligned particularly when all the analysts were pushing the sell button recommendation, it was then a great buying opportunity for the value and yield investors particularly those who bother to open the hood to check the fundamentals. Also the fact that it was trading at half its NAV, it was a great takeover target as one of my prediction possible outcome. At $12 it is about its NAV. But how do you value the big acreage concessions? The takeover is supposed to have a stronger financial backing to get its full potential which if I were to conservatively estimate 50% retracement, the stock will be worth around $23. Therefore, I think $11 cash/share + 1 share will be much better than $12/share profit taking. On the basis of this, I am not selling.


$40+ was history. The question now is whether a $12 NAV and its fundamentals can provide more return for the share holders, that is anyone's guess.

I admit that I don't fully understand what's happening with the proposed acquisition. This is very close to an IPO play, with risk that the deal does not go through, sending the stock back to pre-announcement level. I did have a brief seller's regret moment, and wondered if it was worth to hang on to it for the newly proposed company's potential. I chose to lock in profit, and revisit the new company later to determined if it's worth buying in the future.
I am cautiously optimistic. When it goes up, I claim I have been optimistic; when it goes down, I claim I have been cautious.
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Re: What am I missing about Petrominerales?

Postby Justise » 06 Oct 2013 19:27

max88 wrote:
Justise wrote:The fact that this stock was trading at $40+ a share mean that all the stars were aligned then, and when it was trading at lows of $5+ means that all the stars were misaligned particularly when all the analysts were pushing the sell button recommendation, it was then a great buying opportunity for the value and yield investors particularly those who bother to open the hood to check the fundamentals. Also the fact that it was trading at half its NAV, it was a great takeover target as one of my prediction possible outcome. At $12 it is about its NAV. But how do you value the big acreage concessions? The takeover is supposed to have a stronger financial backing to get its full potential which if I were to conservatively estimate 50% retracement, the stock will be worth around $23. Therefore, I think $11 cash/share + 1 share will be much better than $12/share profit taking. On the basis of this, I am not selling.


$40+ was history. The question now is whether a $12 NAV and its fundamentals can provide more return for the share holders, that is anyone's guess.

I admit that I don't fully understand what's happening with the proposed acquisition. This is very close to an IPO play, with risk that the deal does not go through, sending the stock back to pre-announcement level. I did have a brief seller's regret moment, and wondered if it was worth to hang on to it for the newly proposed company's potential. I chose to lock in profit, and revisit the new company later to determined if it's worth buying in the future.




The probability of the deal not going through is exceptionally low as anti-competition issue does not arise and $11 cash per share plus 1 share of the new company is akin to having eating it and still having the cake. And therefore giving the potential to get to $23/share or beyond and his can happen within 2 years; therefore, again, on the risk return metric, the risk is exceptionally low and the return can be exceptionally high. The $200 million sellers are taking profit, the buyers are thinking like me.
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