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Strategies & Market Trends : Value Investing
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To: Bob Rudd who wrote (13591)1/4/2002 11:40:05 PM
From: isopatch  Read Replies (2) of 78576
 
Bob. Don't use that approach myself

so I'd only be speculating on someone else's motives which is always iffy.

Most industry people put a lot of emphasis on cash flow per share and at what multiple to cash flow a stock should trade at to be fully valued.

Although I think that's a very useful approach. I don't put a lot of weight on it in my own work. Once I'm satisfied that the company has a good balance sheet and has a mgt team committed to increasing shareholder equity?

I'm more interested in the quality of the prospect portfolio the companys geological and land acquisition team has assembled in combination and what their field operations people are doing with those prospects.

In other words, what kind of drilling success have they demonstrated over time? The productivity of the wells that are brought in, etc. Is their overall annual production flat, growing or declining?

Then it's mostly a matter of timing my entry and exit from the position. If I can get most of an intermediate term move I'm happy. Think it was Baron Rothschild who said, "I'll give up the first 10% off the bottom and will gladly sell to someone who will hold for that last 10%. Just give me the 80% in between and I'll be happy"

Me? I'm happy with 60 to 75% of the move.<g>

Isopatch
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