Q: Can you provide your current view of this company. How strong is the management team. Could this possibly be a multi bagger over the long run. (Understanding that market it operates in as well as price of the barrel)
5i Research Answer:
At less than 4X earnings, the stock is one of the cheapest within the sector (no dividend). The stock is down 21% YTD and 35% over one year. Debt is pretty high at 2X cash flow. Revenue has grown nicely, but earnings/cash flow has been less consistent. Certainly if it achieved strong exploration success the stock could do well, but this would be a true statement for any sector stock. Production was a record in the last quarter and net debt was reduced by 5%. Insiders own 2%, associated GMT Capital owns 30%. We would consider management mid-tier and would not see it as a must-own name in the sector.