The wait list Investing - Example of Selan Exploration
Selan exploration was added to to model portfolio purely on basis of event that we see materializing in next 18-24 months. As luck would have it when I started looking at the stock back in February the price levels were 350. At the the time of writing the
We added Selan exploration to model portfolio recently here is my detailed analysis. About SELAN is engaged in oil exploration and production of crude oil and natural gas. The seismic data acquisition being undertaken for the Company’s oilfields has been completed. The Company's oil fields are located in Bakrol, Indrora and Lohar oilfields in the State of Gujarat. The Company also has Ognaj oilfield and Karjisan gasfield situated in the State of Gujarat. Now first of all if you don’t understand E&P business its better you avoid this one. This is a complex industry which requires detailed study. Look at the production levels for company
Year Lohar Indora BAKROL TOTAL OIL GAS OIL GAS OIL GAS OIL GAS (1000 Tones) mm3 (1000 Tones) mm3 (1000 Tones) mm3 (1000 Tones) mm3
2004
2.64
0.04
0.79
0.04
5.54
0.13
8.97
0.2
2005
2.82
0.04
0.86
0.04
6.16
0.14
9.84
0.22
2006
2.63
0.04
0.74
0.03
7.02
0.16
10.38
0.24
2007
3.87
0.06
0.81
0.04
9.58
0.22
14.27
0.32
2008
4.98
0.08
0.98
0.04
13.4
0.31
19.36
0.44
2009
6.07
0.1
0.69
0.03
33.85
2.31
40.61
2.44
2010
5.76
0.1
0.64
0.03
29.28
10.26
35.67
10.39
2011
5.83
0.1
0.56
0.03
21.16
9.9
27.55
10.02
2012
8.61
0.14
0.58
0.03
16.45
9.34
25.64
9.51
2013
8.61
0.14
0.87
0.04
13.56
9.24
23.03
9.43
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Value of stock
Given the production has remain constant over last some years, valuation on basis of earning is very subdued at almost at 50% of current market price Also since production was constant the cash flow numbers have remained constant, reflecting intrinsic value of INR 279. The company has been able to generate constant free cash flow, would expect it to continue. On a growth basis the company seems attractive available at 40% discount. Download complete financial analysis Selan_Analysis_latest
Some numbers for crunchers !!!
Cash flow growing at 10% Revenues growing at -0.72% Profit growing at -0.80% Book value of share increasing at 3.43% Not very exciting as they cover last 4 year history Like life stocks too have divergent views Read below Positive review Negative review As always have a nice weekend Share if you feel content is good. Subscribe as more is coming your way PS - Stocks discussed here are for educational purpose. Please don't buy based on this do your independent research. It is very easy to lose all your money in stock markets.