I do not own this stock of Obsidian Energy Ltd (TSX-OBE, OTC-OBELF). I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. In November 2001, there was a stock exchange and the stock became Ultimate Energy Fund. In June 2004 fund changed from Ultimate Energy Income Trust to Petrofund Energy. Petrofund Energy merged with Penn West in July 2006. The company changed its name from Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE) to Obsidian Energy Ltd (TSX-OBE, NYSE-OBE) in 2017.
When I was updating my spreadsheet, I noticed analysts are losing interest in this stock. In 2018 there were lots of estimates, for 2019 there were only estimates for Revenue and EPS. For 2020 and 2021 I have found estimates for Revenue, EPS and CFPS.
The dividends were cancelled in 2015. They had not made a profit for a few years prior and have not made a profit since either.
Debt could be a problem, especially long term which really comes due in 2021. The Long Term Debt/Market Cap Ratio for 2019 is 0.40 which is fine. However, they were renegotiating their debt. The ratio should have been 6.79. The Long Term Debt then went back up for the first quarter and the ratio is 11.00. The main reason is the crash of the stock price, but this ratio has been higher than 1.00 since 2018.
The Liquidity Ratio for 2019 is 0.28, but if you add in cash flow and current portion of the long term debt it is 1.46. I prefer 1.50 or better but this is fine. The Debt Ratio is good at 2.34. The Leverage and Debt/Equity Ratios for 2019 are good at 1.74 and 0.74.
The Total Return per year is shown below for years of 5 to 23 to the end of 2019. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | -33.93% | -42.61% | -44.08% | 1.47% |
| 2009 | 10 | -26.78% | -28.39% | -38.98% | 10.59% |
| 2004 | 15 | -19.39% | -1.60% | -29.66% | 28.05% |
| 1999 | 20 | -10.61% | 32.21% | -18.77% | 50.98% |
| 1995 | 23 | -8.19% | 9.02% | -20.60% | 29.62% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative. The corresponding 10 year ratios are also negative. The corresponding historical ratios are 5.22, 7.55 and 11.00. The current P/E Ratio is negative as is the one for 2021. So, we cannot do this test.
This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $1.03. This is the best I can do. The 10 year low, median, and high median Price/Graham Price Ratios are 1.38, 3.64 and 5.59. The current P/GP Ratio is 0.57 based on a stock price of $0.60. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 0.50. The current P/B Ratios is 0.12 based on a stock price of $0.59, Book Value of $346M and a Book Value per Share of $4.74. The current P/B Ratio is 75% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Cash Flow per Share Ratio of 6.78. The current P/CF Ratio is 1.18 based on 2020 CFPS of $0.50, Cash Flow of $36.5M and a stock price of $0.59. The current ratio is 83% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.
I can not do any dividend yield tests as the dividends were suspended in 2016.
The 10 year median Price/Sales (Revenue) Ratio is 1.55. The current P/S Ratio is 0.18 based on 2020 Revenue estimate of $236M, Revenue per Share of $3.23 and a stock price of $0.59. The current ratio is 88% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is relatively cheap. This can come as no surprise. All the test except the P/E Ratio test and Dividend yield test shows this. I could not do the P/E Ratio test nor the Dividend Yield Test.
Is it a good company at a reasonable price? This company is selling relatively cheap. Just because the stock price is cheap does not make this a good buy. A buy would be highly speculative. It is not the sort I would buy. However, I tend not to buy resource stocks at the best of times
When I look at analysts’ recommendations, I find Hold (1), Sell (3). The consensus would be a Sell. The 12 month stock price consensus is $0.07. This would imply a total loss of 88%, all a capital loss.
The last entries were in 2019 and analysts say on Stock Chase do not buy. Mat Litalien on Motley Fool was positive about this stock but this was in August 2019. A writer on Simply Wall Street does a review of this stock in February of this year. A writer on Simply Wall Street talks about insider buying at this company. There is a notice by this company on BOE Report of this company now trading as a OTC in the US market. The company has been delisted from the NYSE.
Obsidian Energy Ltd, is an intermediate-sized oil and gas producer with strategic assets in Alberta. It operates in a single reporting segment that is exploration, development and holding an interest in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin. Its web site is here Obsidian Energy Ltd.
The last stock I wrote about was about was TMX Group Ltd (TSX-X, OTC-TMXXF) ... learn more. The next stock I will write about will be Atlantic Power Corp (TSX-ATP, NYSE-AT) ... learn more on Friday, July 17, 2020 around 5 pm. Tomorrow on my other blog I will write about Why Black Wealth Matters in White Americalearn more on July 16, 2020 around 5 pm.
Also, on my book blog I have put a review of the book Rise and Fall by Paul Strathern learn more...
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