Exceeding expectations, Pilgrim's Net Revenues for the year totaled $410,096 as compared with $1,471,507 in 2006, a decrease of 72% compared with 2006 as a result of debenture of properties last year. Net Income, on the other hand, was $33,725,949 compared with $516,814 last year, demonstrating an escalating increase year after year.This announcement has had absolutely no effect on the price of the stock, and here's why: the vast majority of this "revenue" is from the sale of properties in exchange for stock in an unknown company. It's not profit (generated by operations), it's not liquid assets (I expect they can't sell the stock to generate capital for a long period of time), and it's probably not worth as much as they claim (they're reporting value at the time of sale, not present value of the stock).
Pilgrim has a long history of making outlandish claims about money they don't have, especially in terms of "estimated" reserves of oil - which isn't profit until it's pumped and sold, and the figures are usually drastically revised (with a great deal less fanfare) at a future date.
In spite of all the grandstanding, I have faith in the company's potential for future growth. Provided that oil prices remain high (and there's no sign of that changing), there's good money to be made in squeezing shale ... and the company has sufficient (legitimate) resources and income to stay afloat until they strike oil. So while the constant stream of outlandish claims may be destructive to the price of their stock, it's of little consequence to the long-range prospects.
No comments:
Post a Comment