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Baupost buys 11% of Bellatrix Exploration


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That is right, but notice that he bought about the maximum a fund normally would. What it tells me is that he sees an opportunity here worthwhile enough for him to go do it despite the size of the stake vs his fund.

 

FYI, Bellatrix trades currently at metrics that are very similar to Talisman Energy at the lows last year. And has an activist already on the board or Mr. Lewis from Orange Capital. However, contrarily to Talisman, it only has desirable assets in the WCSB and is much smaller. Percentage of natural gas produced vs liquids is also quite similar to Talisman.

 

I own none of BXE at the moment because I am involved with names that I believe are even more attractive but, it is very tempting.

 

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How would you begin to analyze this company?  I looked at the investor presentation and annual report.  Management said their goal is to grow on a per share basis.  But the share count is being diluted year-over-year.  However, revenue and operating cash flow are growing too.  It looks like the business is selling for 0.4 book value.  But are their assets worth book value though?

 

Klarman ideas tend to be too complex and high-level for my small brain.  From what I've seen, it does look interesting.

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Guest notorious546

How would you begin to analyze this company?  I looked at the investor presentation and annual report.  Management said their goal is to grow on a per share basis.  But the share count is being diluted year-over-year.  However, revenue and operating cash flow are growing too.  It looks like the business is selling for 0.4 book value.  But are their assets worth book value though?

 

Klarman ideas tend to be too complex and high-level for my small brain.  From what I've seen, it does look interesting.

 

I wouldn't really look at book value. reserves value, cash flow generating ability are all driven by the prevailing commodity price environment.

 

Over the past month there hasn't been any large insider buying. Orange capital has bought shares consistently up till the last week of january

 

https://canadianinsider.com/node/7?menu_tickersearch=BXE+%7C+Bellatrix+Exploration

 

In term's of modelling the company. Key drivers are volume guidance for the company and then estimating the company's netbacks, the cost side can be estimated fairly well off historicals and adjustments on company guidance (plant ramping up in 2015, will bring down op costs). the revenue side is pretty challenging in comparison, you just take historical price realization on oil or gas then apply a historical differential to a set of assumed prices for the balance of the year. EIA does some forecasts regularly while the forward price curve could also help and is often what company's use.

 

consensus numbers look like a steep drop off in CF for 2015 numbers compared to 2014.

 

 

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