Kenneth Peak is the former CEO of Contango Oil & Gas (MCF) who passed away in 2013. Here is a collection of investor presentations that were taken down from the contango.com website:
Ken Peak MCF presentations (36MB Zip file on Dropbox)
I find that ranking stocks is a useful analytical tool. Ranking stocks against each other helps me be more realistic about how good or how bad a stock is.
I have some extreme and unconventional viewpoints. Many “value investors” would have a list that would be the opposite of mine. Many of the stocks I have shorted have been mentioned on ValueInvestorsClub.com as longs or potential longs. Many of these people are quite intelligent and eloquent. In my opinion, the longs do not understand how they are being bamboozled and misled by stock promoters. I’ve written about this many times on this blog (e.g. “How would a sociopath fleece investors in oil and gas?” and “Beating Wall Street in oil and gas“).
While the independent E&P sector has seen a meltdown in share prices, I don’t see undervaluation. The problem is that many of the companies continue to be run by stock promoters and charlatans (more so in the small caps than the large caps). Until the management teams get better, I don’t think that the independent E&P space will be a good place to look for longs. My prediction is that there will be more pain to come when NGL prices collapse.
On the surface, it seems that measuring key metrics for a business can lead to improvements. Many businesses will try to quantify their operations instead of relying on qualitative goalposts. This is probably a good idea in most situations. However, the real world is messy and difficult. Sometimes employees will game the metrics used to measure their performance.
Contango recently announced a merger with Crimson Exploration. It’s crazy. I think that the late Ken Peak chose the wrong person to be Contango’s CEO.
KB Home (KBH): The stock ran up (around $19.57). Originally I said that they should sell stock… now they are doing exactly that. This is somewhat bad for the shorts (~34% of the float is short) as intrinsic value will move closer to the secondary offering price. I plan on waiting to see if the short thesis plays out.
Queenston Mining (QMI.TO) – closed at a profit
Sold Queenston Mining at $5.27ish for a nice profit. Osisko announced a takeover of Queenston (0.611 Osisko shares for every Queenston share). I sold because it seemed to me that Queenston was close to fair value. At this point in time, a competing bid seems unlikely to me. One reason is that Osisko’s bid has a non-solicitation clause that Queenston management agreed to. Agnico Eagle Mines, which has a strategic investment in Queenston, will not be bidding on Queenston as it struck a deal with Osisko.
Here’s what I know about the sector so far:
