There will be a reversion to the mean (within +/- 10% of book value) at some point, with a high probability of an overshoot on the upside, just like the current overshoot to the downside. I like getting paid 9.4% to wait for the inevitable. Will there be a "market event" like Keystone? Iran toast? Fracking disaster? Buyout? Or just the month in / month out slog of getting paid 9.4% while Lindbergh ramps up? Don't know about you, but this seems like a win/win situation to me... full disclosure: I'm long in various accounts with the auto drip feature "on".
PGH market cap + net debt = Book value.
Market is fairly valuating PGH.
From cash flow point of view, it is even worse. 2013 Q1 fund flow is 146m. Assume there is no decline of fund flow for 10 years. Total fund flow is ~6.4B. Less of 1.8B debt and discount to current currency, 2.6B of market cap is fairly reasonable.
Do not dream PGH to bring back a high return. A business model has proven itself for 10 years and failed. This happens with such a high crude price. What can PGH ask more?
PGH market cap + net debt = Book value
Wrong. Market cap simply refers to the value of the company shares and is found by multiplying the share price x the number of shares. Book value=total assets - intangible assets - liabilities.