Fergie,
The "value" comparison seems reasonably accurate to me. Most all of either's properties are low cost and long life,that's all they invest in. I do think FN's cash is lower than you related. Your figure is probably pre-investment in VBN,Aber and maybe some others(I think). They will replinish the coffers rapidly, so I'm not concerned. I think EN has done so much better lately because today's markets reward net earnings increases so much as opposed to value and FN's EPS has fallen the last couple of quarters. All value investments have lagged rapid growth shares for a while now. The worm will turn someday and someday FN's earnings will explode anyway. I forgot the gentleman's name who is the "father" of value investing,but I read his book. His position was it either made imminent sense immediately to someone who heard the theory or it never would. It always has resonated with me,because I take the position that investing in equity is no different than buying bread. Same loaf for cheaper price is a bargain and will eventually be seen in the share prices. In the case of FN we have value,but we also have excellent management. It's not like they are sitting on an asset,but don't have the skills to see the value accrue to us shareholders. They do. It is only a matter of time before their earnings and share price travel onward and upward. This may be a couple of years from now,but when it kicks in,I think FN will re-assume it's pre-emminent share price over EN,unless EN makes some real nice investments in the next year or so. So,again,I agree with your valuations. I would invest in FN today personally. But,if I was investing solely for gold leverage or for a couple of years only, I think EN may very well do better. BTW,the next big FN investment is to be in NA oil/gas assets based on the quarterly.
TM |
