Opinions
Bill Bonner
Painted Pony Energy
PONY-T
STRONG BUY
Oct 07, 2015
$6.830
Stock price when the opinion was issued
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They have significant assets in the core area that will benefit from LNG. They had a tough second quarter and production came in because they shut in some production. The fourth quarter is going to be good. He thinks they can buy down debt next year. It is a higher beta stock and not owned by institutions. They could be a takeover candidate 3 or 4 years down the road.
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He is bullish on Albertan-based natural gas because we have declining production and supply, increased take away capacity and inventories are at a 10 year low. The winter will eventually come and then there is the prospect of depleting storage. A lot of Nat gas companies have hedged away their Alberta gas exposure. Pony still leaves him a little uncomfortable, however. He likes BRK-T, TOU-T and ARX-T. The balance sheet of PONY-T leaves him pause.
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He partially sold when it rallied some months ago. They are delivering on their promise. The question is what is going to happen with the LNG in BC. One of those projects is bound to go and they are positioned to deliver Nat gas to those projects. He very much likes the stock at today’s prices.