New positions I have initiated without doing thorough research. (I’m not kidding when I say that I haven’t done much research…)
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writeups – shorts
Rex Energy (REXX)
Rex Energy is a $1B independent oil & gas company. In many ways it is similar to other independent E&Ps (mediocre track record of value creation/destruction, high insider pay, constantly raising capital, etc. etc.). Its most recent secondary offering was a year ago in 2012 when it sold shares for $9.25/share (for proceeds of $8.81 before dilution from the over-allotment option). The current share price is $19.07.
While its balance sheet is not as deceptive/aggressive as Miller Energy or TransGlobe Energy, Rex has large liabilities that look a little suspicious.
The trade is a little crowded as 15.6% of the float is sold short.
Continue reading
Metanor Resources: Trying to dig itself out of a hole
Metanor Resources trades on the TSX Venture exchange under the symbol MTO. At 14 cents/share, its market cap is $37.42M.
Excluding its mining assets, the company has around $11.522M of assets versus $52.633M of liabilities. This would imply a value of $78.531M for the mining assets. The cash flow of their flagship Bachelor Lake mine suggest that the mining assets aren’t worth anything near $78.5M. The shareholders may very well be wiped out.
Pretium recap
This is a chronological summary of everything that’s happened to make the story easier to follow, plus my updated thoughts on this strange saga.
Avoid Technology: How does a company not manage to file its financials?
Sorry, was that a typo? I meant to say Avid Technology (NASDAQ:AVID). I’ve written about the company in the past (“How to lose money when you’re the market leader“). The thing about this company that I don’t understand is why it can’t file its financials in time. Their excuse doesn’t make sense to me.
Pretium: Now the pieces of the puzzle are coming together…!
Read the article “Strathcona Minerals responds to Pretium’s bulk sample result” if you haven’t already.
Originally I thought that there was either (A) fraud or (B) Strathcona screwed up. In a totally bizarre and unexpected turn of events, Strathcona is right but there is no fraud*.
