Friday, December 4, 2015

Crescent Point Energy Corp. 2

Sound bite for Twitter and StockTwits is: Cheap, but risky. No one knows when oil prices will recover and I cannot see recovery in the oil patch until oil is at a better price. At the moment it is risky to buy any oil or gas company. See my spreadsheet on Crescent Point Energy Corp.

I do not own this stock of Crescent Point Energy Corp. (TSX-CPG, NYSE-CPG). I got this idea to look into this stock from another blogger, My Own Advisor and his November 2012 blog entry on great Canadian dividend paying stocks. I also noticed that several people at the Toronto Money Show of 2013 mentioned this stock.

There has been some insider trading with both insider buying and insider selling. There is net selling worth some $1.8M and 0.02% of the outstanding shares. This is a moderate amount of net insider selling. I am tracking 6 insiders, the CEO, CFO, two officers, a director and the chairman. Since I looked at this stock last year, two insiders have sold shares, two have added to their shares and one as the same number.

The CEO had shares worth around $11.8M, the CFO has shares worth around $3M and the chairman has shares worth around $9.7M. All their shares add up to less than 1% of the outstanding shares.

Since the company is expected to have an earnings loss for the next two years, we really cannot do any stock pricing using the P/E Ratios.

I get a Graham Price of $18.39. The 10 year low, median and high median Price/Graham Price Ratios are 1.56, 1.79 and 2.02. The current P/GP Ratio is 0.93 based on a stock price of $17.14. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year Price/Book Value per Share Ratio of 1.79. The current P/B Ratio is 0.82 based on a stock price of $17.14 and BVPS of $20.97. The current P/B Ratio is some 54% lower than the 10 year median P/B Ratio. This suggests that the stock price is relatively cheap.

The 5 year median dividend yield is 6.96% and the current dividend yield is 7%. The current dividend yield is based on a stock price of $17.14 and dividends of $1.20. This stock price testing suggests that the stock price is reasonable and below the relative median. The historical median dividend yield is 8.85% and this is some 21% above the current dividend yield and suggests that the stock price is relatively expensive.

The 10 year Price/Cash Flow per Shares Ratio is 8.51. The current P/CF Ratio is 4.24 based on 2015 CFPS estimate of $4.04 and a stock price of $17.14. The current P/CF Ratio is some 33% lower than the 10 year median P/CF Ratio. This suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The recommendations are mostly of the Buy kind and the consensus recommendation is a Buy. The 12 month stock price target is $24.76. This implies a total return of implies a total return of 51.46% with 7% from dividends and 44.46% from capital gains.

This is the second of two parts. The first part was posted on Thursday, December 03, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Benjamin Sinclair of Motley Fool thinks that the price of oil is not going to improve anytime soon. Matt Smith also of Motley Fool has a more positive attitude to this stock. The site of Investor News Wire talks about Zacks Research which says that this company will have positive earnings for the four quarter of 2015.

Crescent Point Energy Corp. is a Canada-based oil and gas exploration, development and production company. The Company is a conventional oil and gas producer with assets focused in properties consisting of assets light and medium oil and natural gas reserves in Western Canada and the United States. It is involved in acquiring, developing and holding interests in petroleum and natural gas properties and assets through a general partnership and wholly owned subsidiaries. Its web site is here Crescent Point Energy Corp.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

No comments:

Post a Comment