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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (38722)	8/8/2010 8:04:16 PM
From: Spekulatius	Read Replies (1) of 78462

re E-K_S - i look at the McDep ratio and find it an very iffy measure. The problem as always is how to calculate the NPV. As for PWE, i actually think it's overvalued because I my opinion, it cannot sustain a 8.4% distribution. Just look at production and reserves / share as a metric. This year again, production is down 10% (due to the partial sale of the heavy oil partnership) which just seem to be a continuation of the trend that I have observed a couple of years. Sharecount is up another 5% - gop figure. If you have a stock yielding 8% that shrinks by 3% overall then you really getting only 5% yield on your money, the rest is returen of capital. it's one of the reasons I don't like producer (Oil/Gas) MLP's at all. Some Producer MLP's can sustain yields for a while if they are able to issue new shares (to buy new producing assets) for a while - this works as long as the shares trade at valuation that acquisitions can be performed accreditation to the NPV.

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