After reading your earlier post about negative book value, I went back through my AXAS file and found a few interesting pieces of information. I am still convinced that AXAS will be a grand slam.
First, according to the CIBC Oppenheimer analyst report dated January 5, 1999, AXAS has a fair market value of $16.64/share. This is the sum of the proved reserves (New Cache included), gas processing facilities, undeveloped acreage, less debt. A similar report from ING Barings dated 12/11/98 assigns a net asset value of $10/share, including probable reserves.
CIBC Oppenheimer estimated AXAS's probable reserves at $15.05/share, but didn't include probable reserve value in calculating fair market value. Their target price was reiterated at $15/share, quite a sizeable premium over today's sub $2 price. ING Baring's target is $10/share.
The other item of note is that AXAS's Q1 cash flow from operations came in at $7,776M, versus $4,370 from 1998 Q1. In other words, cash flow actually improved, though prices were still depressed for most of Q1. Cash at end of the quarter was $14,725, or about $2.30/share, more than today's closing price of the stock!
Last, insiders have been big buyers of this stock, and much of the buying was at much higher prices than the sub $2 range we're seeing today. |
