Should I be concerned by the fact that on page 34 of the Oct 27 2016 AGM presentation, it shows the operational cash flow only up by 1% year over year, yet the company is increasing debt by nearly $50M per year to buy more PDP?
It feels like debt to buy PDP is showing high earnings growth, but ultimately that is not coming out as cash flow. In the presentation, at least, they are not telling you how much of the operating cash flow pre-PDP is attributable to each prior purchase year. Is there any place we can follow through a PDP acquisition in Year X, and then actually see the return of that one PDP over the next five years, to calculate the actual return on investment using a discounted cash flow?
Isn't this how Credit Corp got itself into trouble prior to the Global Crisis, by taking on a lot of debt to buy up PDP without adequate cash returns?
PNC Price at posting:
$1.89 Sentiment: None Disclosure: Not Held
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