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I can’t figure this company outMy opinion is that they priced the $10.00 IPO to give a 7% payout yield when everything went online and in service. So, that would give $.70 annual dividend. Alpine High was abandoned, so no revenue from Apache. The compressor stations are in service and performing to expectation. All of the pipelines are as service, except one, which will be in service 2021. and one declined. There was the reverse split of one for 20 shares. Multiply $.70 by 20 and you get A $14 dividend… the share price right now is a little above $12. So, a $14 dividend on a $12 share price would be pretty good. You would think at least half??? of the expected cash flow would be coming in and generate enough to pay???? How much of a dividend? that is the intrigue. They would probably start out with a conservative payout, with plans of raising a little bit over time. If they paid $.30 each quarter, equaling a $1.20 annually. That would be near a 10% yield at today’s prices. But that is a small, not even 10% of the original expected payout. Since they did the reverse split. There is no need to get the stock price higher to meet requirements for continued listing. The CEO did buy shares regularly and he is deeply in the hole on those purchases. I’m sure he realizes that a strong dividend would bring the share price up greatly. Until they actually announce a dividend, investing here is just a blind gamble. You could buy shares in hopes of a dividend announcement that would give a 40% yield, which would cause the price of shares to increase IMO. That is the upside. What is the downside? We seem to have found a floor to the stock price… Here about the $12 range. What could make it go lower…. that is a good question. They can have customers of the pipelines they are in partnership with default on their commitments to use the lines. It seems that there could be too much line capacity in the Permian basin area with all these lines in service and now that area is losing production. The stock price seems to be fairly volatile… But I am not much of a trader to try and buy when the prices near $12 and sell when it hits $13.50. The Q2 earnings come out tomorrow evening and maybe that will give us more of an idea of where this company is headed. So far it has been a disaster for anyone that has invested in it. We know that was not the plan, but that is a fact. Things are bad for everything related to oil and gas.(see my perfect storm post) Maybe someday that will change, but not with $40-$45 oil and a $1.80 natural gas. Does anyone else have any opinions or wild guesses on what will happen with this company? We can speculate if you desire. |
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