06-27-2012, 11:49 PM
(This post was last modified: 06-28-2012, 12:14 AM by ValueSleuth.)
Porter Stansbury and his minions are out trashing the stock after Porter published an analysis on Friday in his "The S&A Digest" email.
Unfortunately, some of Porter's key points do not reflect reality, so the view is grossly distorted. He seems to have forgotten the Macondo well blow up. In addition, he effectively claims that the possible resources from Shimshon are already reserves and apparently doesn't realize that the 1st exploratory well hasn't even been evaluated. Add to that the various wells pending hookup before the end of the year that will effectively double production. Well, you get the picture.
This makes his case of using ATP as proving his bigger point on leveraged companies less than compelling.
Nice try, but no sale, Porter.
The only point on which he's really correct is nothing we don't already know -- ATP is highly leveraged.
His comments about buying the debt and selling the stock is quite a no brainer, so there's nothing new there.
However, for the venturesome, those who think ATP will avoid bankruptcy, will profit handsomely from owning equity securities -- i.e. the common stock and the perpetual cumulative convertible preferred stock.
If he Shimsohn well comes through and actually confirms the resources, ATP's 1 TCF share will DOUBLE reserves. There'll be no bankruptcy in that case.
VS
Unfortunately, some of Porter's key points do not reflect reality, so the view is grossly distorted. He seems to have forgotten the Macondo well blow up. In addition, he effectively claims that the possible resources from Shimshon are already reserves and apparently doesn't realize that the 1st exploratory well hasn't even been evaluated. Add to that the various wells pending hookup before the end of the year that will effectively double production. Well, you get the picture.
This makes his case of using ATP as proving his bigger point on leveraged companies less than compelling.
Nice try, but no sale, Porter.
The only point on which he's really correct is nothing we don't already know -- ATP is highly leveraged.
His comments about buying the debt and selling the stock is quite a no brainer, so there's nothing new there.
However, for the venturesome, those who think ATP will avoid bankruptcy, will profit handsomely from owning equity securities -- i.e. the common stock and the perpetual cumulative convertible preferred stock.
If he Shimsohn well comes through and actually confirms the resources, ATP's 1 TCF share will DOUBLE reserves. There'll be no bankruptcy in that case.
VS