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stylishlalit

332 Posts.

29

05/02/16

16:53

Post #: 16953619
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Originally posted by wasko ↑

I think it's lazy to lay the blame of any current share price drops at the shorters feet. The reality is that short positions in AWE have been trending down since October last year.

There is a lot of fear in the market as evidenced by the terms "bankrupt" and "survive" being thrown around in some research pieces on energy stocks. AWE is no longer a concern as they have approx. $0 debt after the sale of Sugarloaf. In fact, according to the company, they will have a net cash position of $60m and, according to my lazy calculations, possibly ~$500m in assets (I've deducted an amount for Sugarloaf + expected upcoming impairment). Now, compare $560m to the current market cap of $220m and this stock is trading on a price to book ratio of .39 which is why I am taking a position.

The purpose of this post is not to show off my accounting skills (they suck) but to try and give people an idea of why I see an opportunity amongst the fear.

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Did you take $50.00 tax into account that needs to be payable at of june 2016(I guess you probably not) Whole energy sector is beaten down. Surely removing debt is a big thing right now.

AWE Price at posting: 44.0¢ Sentiment: Hold Disclosure: Held
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