jim p or anyone else: What do you see as the likely effect
on APC's stock price from this reporting debacle? It looks terrible but then it doesn't appear to alter the company's cash flow, and isn't that the relevant metric? That profits are now seen to rise more next year, even as the stock tanks tomorrow, will comfort only persons not yet in it! Many will sell just because the company's ineptness cost them money, and trust is gone. To take their shares?--that is the question.
Seems to me that illusory past profits shouldn't matter much to someone who hasn't been burned, and is offered a price that looks attractive from a P/CF standpoint. So: (1) how low is cheap? and (2) is that all the mess there is? My sense of #1 is that 4x CF is cheap for Anadarko, which is about $36.
Edit Yahoo shows cash flow/share of 11.60 3Q YTD. I guess I already need that "modeling" conference the company is holding Feb 7! Hard (at least for we non-accounting-oriented folks) to make sense of the numbers.
Or figure a higher multiple but a lower cash flow # had the company noted that it wasn't pumping profits and slowed down? Here's a 2 year chart:
stockcharts.com[h,a]dbclyiay[de][pc25!c50!c200!i!f][vc60][iUb14!Uk14!Lc14!La12,26,9!Lp14,3,3!Lg!Ll14]&pref=G
How much of a mark-down do expect and/or see as a buying opportunity, given a medium term outlook? 36 happens to be about the lift-off point in April 2000. If it gets there at all, it may not be in one day. I just doubt I'll begin buying before then, seeing it as too early in the cycle given what I've read from the astute folks here.
If the stock gets dumped all out of proportion to any fundamental significance of this news, it may be time to add an E&P. Thankfully, I sold all my Berkeley after that acquisition and am not holding this bag. |
