Monday, January 17, 2011

January Update for the Key Fundamental Statistics for the Oil and Gas Industry in Canada

Provided below are some of the Key Fundamental Statistics for the Oil and Gas Industry in Canada. These numbers are an update of my original article that can be referred to here. I recommend that you read that one to give this information some context. This article mainly focuses on producers or companies very near production. Referring to the margin statistic, investors in ALE learned a tough lesson this week that there is a lot of risk involved with companies that have very bad current margins and are burning a lot of cash. Investors in OPC have been learning that for months now.

The two stocks that I own on this list are Compton Petroleum and Petrolifera Petroleum. Compton once again dominates this list, mostly because its stock price has been down in the dumps while other oil and gas companies increase. I'm resigned to the fact that it looks like CMT will struggle for a long time but I am confident that the stock will once again regain form and be a $10 stock. Even at this low natural gas price, Compton's profit margin is only -2.5%. Once people realize that natural gas isn't like sugar and that its a valuable energy source, demand will outstrip supply and the new, leaner Compton will be making much more profit than it ever did when the stock was at $14 It just may be a few years from now.

PDP on the other hand has woken up from its slumber this week. Makes sense as it is far undervalued compared to South American peers like GTE. GTE's market cap is almost 20 times that of PDP's and it certainly does not have 20 times more worth in reserves. GTE in 2009 is where PDP will be in terms of production relative to company size in 2012 and you'll see the stock price rise accordingly.

Refer to the following reports from Jennings Capital to compare the two. You will need to create a Jennings Capital username and password to see them (its free):

PDP
GTE

While GTE is unquestionably better off, it is not 20 times better off than PDP and while GTE is pretty close to full value, there's a ton of unrecognized value in PDP's current share price. All because of the market's doubt in Richard Gusella's ability to get a deal done to start up Petrolifera's Peruvian land holdings. Click here if you are interested in further in-depth analysis of the oil and gas sector.

The 25 TSX-listed companies included in this ranking are as follows:

Advantage Oil and Gas Ltd - AAV
Alange Energy Corp - ALE
Alberta OilSands - AOS
Bankers Petroleum Ltd - BNK
Canacol Energy Ltd - CNE
Canadian Natural Resources Ltd - CNQ
Compton Petroleum Corp - CMT
Connacher Oil and Gas Ltd - CLL
EnCana Corp - ECA
Gran Tierra Energy Inc - GTE
Ivanhoe Energy Inc - IE
Nexen Inc - NXY
Opti Canada Inc - OPC
Orleans Energy Ltd - OEX
Pacific Rubiales Energy Corp - PRE
PetroBakken Energy Ltd - PBN
Petrolifera Petroleum Ltd - PDP
Petrominerales Limitada - PMG
Questerre Energy Corp - QEC
Rock Energy Inc - RE
Strategic Oil & Gas Ltd - SOG
Talisman Energy Inc - TLM
Terra Energy Corporation - TT
Transglobe Energy Corp - TGL
Vero Energy Inc - VRO


Price to Earnings

ECA.........11.0
PMG........15.7
CNQ........17.6
NXY.........20.9
Industry...25.2
TGL.........30.9
GTE.........36.6
TLM.........47.7
PBN.........47.8


The companies not listed do not have positive earnings at this time.


Price to Sales

CMT..........0.5
OPC .........0.9
CLL...........1.1
PDP..........1.6
TT.............1.7
NXY..........2.0
ECA..........2.2
RE............2.7
VRO.........2.8
TLM..........3.4
OEX..........3.5
AAV..........3.5
CNQ.........3.6
PMG.........4.2
Industry...4.4
PBN.........4.8
ALE.........5.2
GTE.........5.5
PRE.........5.8
TGL.........6.8
BNK.......16.2
CNE.......18.6
SOG.......19.3
AOS.......22.3
QEC.......35.0
IE ..........45.7



Price to Book

CMT........0.1
OPC........0.2
PDP........0.4
ALE.........0.8
CLL ........0.9
OEX........0.9
TT...........1.0
AAV........1.0
AOS........1.0
PBN........1.2
ECA........1.3
VRO........1.3
NXY.........1.5
RE...........1.5
QEC........1.6
TLM.........2.0
CNQ.........2.1
GTE.........2.5
IE ............3.1
Industry...3.2
SOG .......3.8
PRE........4.4
TGL.........4.8
BNK........6.2
CNE........7.2
PMG........7.3



Price to Cash Flow

CMT...........2.4
TT..............4.3
NXY...........5.0
PDP..........5.4
VRO..........5.9
AAV..........6.2
TLM...........6.7
PBN..........6.8
RE............7.0
CNQ..........7.2
ECA..........7.8
GTE..........10.7
PMG.........11.7
Industry...12.1
OEX.........12.4
PRE.........13.2
CLL .........13.9
TGL..........21.3
BNK.........34.3
QEC.........93.0



Profit Margin

PMG........23.76%
ECA........16.47%
CNQ........15.58%
NXY.........9.95%
PBN.........9.13%
Industry...6.16%
CLL .........6.26%
GTE.........5.31%
TT............0.03%
BNK........-0.23%
CMT........-2.53%
TGL.........-8.54%
TLM........-11.11%
PDP........-15.09%
RE..........-15.35%
PRE.......-24.03%
AAV.......-24.23%
VRO.......-31.92%
OEX.......-49.56%
QEC......-114.82%
ALE.......-138.51%
AOS......-150.25%
IE .........-159.65%
SOG......-170.42%
CNE......-209.05%
OPC......-212.85%


Disclaimer: The source of my information is TD Waterhouse Market Research services as of January 15, 2011. I own positions in Petrolifera Petroleum and Compton Petroleum.

Click here to see some information on three Canadian oil resource stocks with tremendous potential

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Wednesday, January 12, 2011

January Update to Key Fundamental Statistics for US Banks

Many people have been requesting an update to the numbers in my Key Fundamental Statistics for US Banks ranking. So here are the updates to the numbers for P/E, P/S, P/B, Profit Margin and Dividend yield. The numbers in the original article were after each company's Q3 results so the margins remain the same but these numbers do reflect most recent stock prices so I can understand why people would want to refer to updates. Refer to my original article to get commentary related to them.If there's another metric you'd like to see in this ranking, request it in the comments section and I'll see if I can dig it up the next time I do this. The companies involved in this ranking are:

Bank of America Corp NYSE:BAC
BB&T Corporation NYSE:BBT
Capital One Financial Corporation NYSE:COF
Citigroup Inc NYSE:C
Fifth Third Bancorp NASDAQ:FITB
JPMorgan Chase and Co NYSE:JPM
PNC Financial Services Group Inc NYSE:PNC
Regions Financial Corp NYSE:RF
Suntrust Banks Incorporated NYSE:STI
US Bancorp NYSE:USB
Wells Fargo & Company NYSE:WFC


Price to Earnings

COF….......8.9
PNC.........9.8
JPM.........12.5
USB.........17.3
WFC….....18.7
BBT..........23.5
Industry...34.0
C..............95.9
FITB.......254.5

COF, PNC and JPM would be the banks to be seriously considered as a buy when using the P/E. Every Canadian bank does better than the rest of the US banks so I would lean in that direction if I were a bank investor. BAC, STI and RF are all negative and thus aren't ranked but on a positive note Citi will start having marginal earnings and appears with a positive P/E for the first time in a long time. Notice that the industry P/E has skyrocketed to 34.0 based on huge price increases and mediocre earnings. Investors expect a lot of improvement for Q4 and some positive guidance for 2011 in the next couple of weeks. If it doesn't happen, the banks could be in for a slide.

Price to Sales

BAC.........1.3
COF……...1.4
RF…….....1.4
JPM….…..1.7
FITB……...1.8
STI…...…..1.8
WFC….....1.9
C……...….1.9
BBT….…..2.0
PNC….…..2.0
Industry…2.4
USB……..2.8

Nothing much to say here other than at least we can see where BAC, RF and STI rank because they can't go to negative sales. BAC actually does rather well using the price to sales metric.

Price to Book

BAC……...0.7
RF…...…..0.7
COF……...0.8
STI…...…..0.8
C……...….0.9
JPM……...1.0
FITB….…..1.1
BBT……....1.1
PNC……...1.1
Industry…1.3
WFC……..1.3
USB……..1.8

My personal favourite, BAC leads this list again. Nice to see that if it has a ton of toxic assets on its balance sheet, at least people are paying 70 cents on the dollar for them. COF is near the top of the list here too, impressive since it's at least earning money the "accounting" way. Note that pretty much every bank has had an increasing P/B thanks to an increase in stock price, reflecting investor expectations of positive future outcomes with the toxic assets and stress tests.

Profit Margin

PNC……...20.47%
COF……...17.68%
USB….…..16.54%
JPM……...15.86%
Industry…14.54%
WFC …....14.10%
BBT…….....8.96%
FITB……....5.12%
C……...…..2.50%
BAC……...-1.05%
STI…….....-2.83%
RF……....-18.18%

Dividend Yield %

Industry…2.69%
BBT……...2.26%
USB……...0.77%
WFC……..0.64%
PNC…......0.64%
RF…….....0.55%
JPM….…..0.46%
COF….…..0.43%
BAC……..0.27%
FITB……..0.27%
STI……....0.14%
C……..….0.00%

Every US bank pays a lower dividend than the banking industry worldwide. And while the industry dividend yield has been increasing, these banks' yield has been decreasing thanks to their price increases. It'll be interesting to see if these banks are able to follow up on the rumors to increase their dividends like banks have been doing worldwide. If you're looking for better yields, the Canadian banks have 3-5% dividends. If you're interested in a report that lists the top 100 dividend companies, see my blog on it. It's a subscription service that I find useful and it costs about the same as commission on 3 trades. If I'm going to advertise, it's not going to be on crap.

All numbers are updated as of January 12th, 2011. I do not own any of these companies, probably for a pretty good reason!

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