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Strategies & Market Trends : Value Investing
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To: Jurgis Bekepuris who wrote (27842)8/21/2007 11:39:38 PM
From: Spekulatius  Read Replies (1) of 78746
 
Most canroys appear overvalued to me. the Dividends are not sustainable as the reinvestment after payout ratios of around 70% is not enough to replace the production, so reserves and production per trust unit are sinking. Some Canroys have been getting around this by doing accreditive (in terms of reserves/unit) acquisitions. this only works when share prices are high, but since the tax law disaster last Halloween that is rarely the case any more.

take a look at the PV10 values of most Canroys from their Sedgar filings. you will be surprised to see that they are below the current share prices in many cases. When the tax law changes come into effect, those Canroys will trade at the same PE ratios and cash flow ratios than their peer E&P's.

ERF which Paul mentioned is one of the better Canroys, as they have a long reserve life and low costs. PWE which i owned a while ago looks like a disaster with their dilution and the operating losses they racking up losses at 70$ oil.
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