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Anyone own MCF?


wescobrk
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This thing has sunk like a rock. Some delays and execution issues recently, but good balance sheet and management acted quickly and rationally last year by dramatically cutting capital budget. One of the only E&Ps to not see its stock rebound in last few weeks/months. Question is why?

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I'm certainly no expert on it but they don't have any debt or derivatives that can be called this year. Their debt should stay stable and their working capital will improve throughout the year all this is from the call a week ago roughly.

Tangible book is $550 million. My average cost is $15.30. I bought around 55% tangible book.

I think it's similar to what Buffett thought of Berkshire. An easy 30-35% upside.

We'll see if i'm brain dead or not.

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Yea, sounds like debt will be up from YE 2014 (and flattish with Q1 2015), but total liabilities will be flat to down from YE 2014. That was my take, anyway. Q1 optically looks bad with more than 50% of capital budget spent and some production deferrals into Q2. Q2 production should be flat with Q1.

 

Only thing I don't like is they layered on some hedges $55-$65 oil in April for the rest of year (previously completely unhedged). I'm a bit more optimistic about the second half for crude, but we'll see.

 

Regardless, MCF seems cheap. I wonder if one of the big holders is liquidating (among which are the usual suspects, Blackrock and Vanguard, but also Ariel and Oaktree have big stakes). If one of them chose to unload their position (which is extremely immaterial for virtually all of the 5% holders), could easily see pressure on the stock.

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