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Strategies & Market Trends : Value Investing

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To: TimbaBear who wrote (20471)	1/15/2005 4:52:54 PM
From: Spekulatius	Read Replies (1) of 78717

re BPT Timbabear, i would be interested to hear why you bought into BPT. I think BPT is one of the most overvalued royalty plays out there. i was short this stock as hedge against my energy longs but closed out the position fortunately. Still i believe the fair value of BPT is at most 30$, based on my NPV model. There is a pretty good discussion in the yahoo BPT board about by the likes of valueprofessors and diogenes1234, both are shorts. the issues with BPT is that production is falling by about 8%/yearly and the trust agreement provides for increased compensation for the operator (BP). The combination of both makes buying BPT a very bad bet on oil prices at the current valuation. I am tempted to get short again in BPT.

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