Opinions
Ron Meisels
TheScore Inc.
SCR-T
WATCH
Aug 11, 2015
Stock price when the opinion was issued
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A young company that's bought several companies and have accumulated a lot of heavy oil production. In their favour are the shrinking differential with WCS oil and lot of drilling inventory, but not in their favour is liquidity is tight, because a single energy fund owns so many shares and likely won't sell. It boasts a decent 15% cash flow. Are better peers to buy though he's tempted by this.
He's not an M&A guy. If you want a really good answer, ask somebody else ;) A board will often reject something like this because they think it should be higher. And maybe a competitor will come along with a better offer.
Right now, if you believe that because of what's going on in the Middle East we might have persistently high oil prices for some period of time, then a lot of these energy drillers will benefit.
In the energy business, scale will be essential going forward.
He uses 2 tools for his analysis: the 40 week moving average and the trend line. In The Score, he can see the 40 week average still rising, but now the price has fallen below it and the trend line has broken. This is where the stock started to back off. Now the stock has developed a downtrend and until it breaks that downtrend line the stock will not stop falling. He thinks the support is around the 2014 trading range. So he believes that we are not far from it and buyers could probably come in. The stock is a little bit oversold. It is in a downtrend right now and you should buy stock when it is in a uptrend.