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Gold/Mining/Energy : Churchill (CUQ), PE of 3!
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To: speculatingvalue who wrote (193)2/11/2000 1:12:00 PM
From: Gulo  Read Replies (1) of 264
 
>If I were them ...
Well, I'm glad you're not them. ;)

I don't like the split idea. A split wouldn't be all that useful at this share price. All it would mean is more brokerage costs to buy or sell. If it were trading at $100, then a split would increase liquidity.

Borrowing would be expensive for CUQ (cyclical industry) but might provide useful leverage in acquisitions.

Acquiring companies with stock would only make sense if the stock were fairly valued. We're a long way from that. Paying cash won't hurt, because we have plenty of it and can make more quickly.

A small annual dividend (e.g., 0.03) might attract some attention and respect in the long run. A large annual dividend (.25) would be considered silly because analysts know the company would not be able to maintain it through cycle bottoms and because it would hamper CUQ's chances at growth. A one-time large dividend would attract only short-term attention.

> If I'm not mistaken, their cash flow is about $20 / share ($200 M in revenues?).
Cash flow and revenues are not the same thing. By 'cash flow', most people mean EBIDTA - Earnings before interest, depreciation, taxes and amortization. CUQ's cash flow should be around .90/share.

That's pretty damn good for a stock at 1.30 and no debt.
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