Timing is everything. With growing attention and focus allocated back into the natural resources sector, investment reporter Tim Shufelt of The Globe and Mail (Canada's most widely read newspaper) recently included TAG Oil Ltd. in its list of "Tempting Takeover Targets."
And why wouldn’t it be? TAG Oil is profitable with an attractive valuation, on track to achieve record financials, and with a share price trading near four-year lows. In The Globe's own words, here's how they compiled the list:
"The primary criterion we screened for was an attractive ratio of enterprise value (EV) to earnings before interest, taxes, depreciation and amortization (EBITDA). (EV is the market value of all its shares plus the company’s net debt.) Also known as the “takeover multiple,” a low EV/EBITDA ratio could signal that a company is undervalued. We limited our search to stocks with an EV/EBITDA of eight or lower. We also wanted to weed out the smaller companies, so market capitalization had to be at least $100-million. Next, we filtered out stocks that had a debt-to-equity ratio of greater than 50 per cent. Finally, to help identify stocks that might be underpriced, we screened for those that were priced at least 30 per cent lower than their 52-week highs."
See the full list of companies here: http://bit.ly/Globe_TAG-tempting-takeover-target
Above and beyond those numbers, TAG is heading into FY2015 with a plan to invest $60 million into exploration by targeting low-risk development, high-impact, and unconventional drilling. All CAPEX will be fully funded by cash flow and available working capital. Listen to a recording of Wednesday's call with our CEO and COO delving into those details, on the TAG Oil website.
Oh, and one last thing. While we're pleased to be recognized as a great value, we still have too much exploration work to complete, and hopefully a lot more oil to find!