This is the third in my three part series on two nat gas names, Diversified Energy (DEC) and CNX Resources (CNX). You can find part 1 (an overview of the series and why I focused on nat gas) here and part 2 (a high level bull thesis for CNX and DEC) here
i m not very familiar with this kind of companies, but income statement looks pretty negative to me, e.g DEC. why did you not talk about this ? it s not a subject of concern ? thanks
Andrew, great job as always. Talking about financial engineering, can you spend a few words about the convertible notes? That generates a bit of dilution, doesn't it?
I like the DEC business model. They could end up with a moat for plugging old wells. But the big question is management’s ability to pull it off.
As for not buying back shares, I would like to see them list in the U.S. first. Buying shares on the LSE would have costs for currency exchange and I think taxes.
Great write ups Andrew. I do want to make a suggestion, every time a read a deep dives Im left wondering... ok how do I value this efficiently, feeling. I undertand it could be a rabbit hole though. However I cant stop feeling that there is something missing.
These writeups on DEC and CNX are excellent. Honestly the marginal value I got (and I presume you got) out of the Tegus calls was small. Helpful, but not big.
I looked at DEC a couple of years back. And yes, it terrifies me that I don't know what I don't know in terms of what the long-term liabilities look like. Too likely that you wake up one morning or year and this thing is deeply impaired.
One thing about DEC. The main issue is whether we can trust the company on the issue of the LT liabilities. The issue I have w DEC is management. They just do not have the background that is fitting: CEO was a banker before turning oil man, and the story about his family being in the business is just very phony. DEC seems amazing on the surface but may well be too good to be true.
Hi,
I thought I'd post it here:
Yesterday DEC announced a ~100m GbP share buyback program and today I received a notification that they bought back 100K shares since yesterday.
Today they also sold 40m GbP of non-core assets. (They claim it to be valued at 4x expected cash flow for 2023)
Cheers
hello,
i m not very familiar with this kind of companies, but income statement looks pretty negative to me, e.g DEC. why did you not talk about this ? it s not a subject of concern ? thanks
Fabrice
Andrew, great job as always. Talking about financial engineering, can you spend a few words about the convertible notes? That generates a bit of dilution, doesn't it?
Thank you
I like the DEC business model. They could end up with a moat for plugging old wells. But the big question is management’s ability to pull it off.
As for not buying back shares, I would like to see them list in the U.S. first. Buying shares on the LSE would have costs for currency exchange and I think taxes.
Great write ups Andrew. I do want to make a suggestion, every time a read a deep dives Im left wondering... ok how do I value this efficiently, feeling. I undertand it could be a rabbit hole though. However I cant stop feeling that there is something missing.
This refers only to this write-up or to all?
"every time a read a deep dives Im left wondering... ok how do I value this efficiently, feeling."
These writeups on DEC and CNX are excellent. Honestly the marginal value I got (and I presume you got) out of the Tegus calls was small. Helpful, but not big.
I looked at DEC a couple of years back. And yes, it terrifies me that I don't know what I don't know in terms of what the long-term liabilities look like. Too likely that you wake up one morning or year and this thing is deeply impaired.
One thing about DEC. The main issue is whether we can trust the company on the issue of the LT liabilities. The issue I have w DEC is management. They just do not have the background that is fitting: CEO was a banker before turning oil man, and the story about his family being in the business is just very phony. DEC seems amazing on the surface but may well be too good to be true.