that Ray could just decide to sell the company or someone comes in and goes after it - either way it would jump considerably and this is another big reason that I like this stock..........2014 will be huge year for all those stocks that didn't run to date so we have a lot of reason to hold this stock. Boolean
Why would he sell. He pretty much has a gravy train i.e. good salary, good bonus, good benefits and who knows how many family members getting paid. Plus he controls the board and has a great poison pill in place. Which is why no institutions are interested in this.
One more comment about the poison pill. Earthstone has a P/E ratio around 10 when it should trade at a 20 ratio. But if the poison pill has repelled institutional investors, the lower P/E may be a long term reality.
So is it worth buying this company, knowing that the P/E ratio could be fixed, but Ray may not do what is necessary for a long time, 2, 5, 20 years….who knows how long.
Also, if eps goes to $3 or $5 in the next couple of years, will that 10 P/E ratio follow it?
On the one hand, it was implemented some three years ago, so the impact should have been baked into the share price long ago. It wouldn’t explain the extreme price weakness in recent times.
But Earthstone share price is undervalued by almost any metric. If you look at EPS, price to book, PV-10 to fixed asset ratio, or whatever method of valuation you might prefer, ESTE share price comes in at about 50% of value when compared to KOG or FPP, etc Is the poison pill part or all of the reason for this under valuation?
If Ray decided in a few years to sell (after he’s completed his vision) we can only guess whether the real value of the shares might be unlocked.
After a market day like today Ray may just say WHY DO THIS or more likely a suitor will come in looking to take over the company. You make some remarks that are not totally fair regarding Ray - sure he is doing OK but all CEO's do........OK. If you don't like it go be a CEO. Ray has built this company up pretty well - no it has not all turned out right YET but we are much better than we were and it should only get better.
Good to see some fear in the market today - it is healthy for the ole boy. Boolean
Unless Ray has a health problem, he isn't ready to sell. His dream is finally being fulfilled. The plan to take this company to $50 million or more in revenue. We are still two or three years off. JMHO!