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Great link get_rich_quick thanks for sharing. I find the links within the resource useful, especially this that estimates the SP is currently 93.4% undervalued - i would certainly be happy with the suggested 62p
https://simplywall.st/stocks/gb/energy/aim-cerp/columbus-energy-resources-shares?utm_medium=finance_user&utm_campaign=conclusion&utm_source=post&blueprint=867042#valuation
https://simplywall.st/stocks/gb/energy/aim-cerp/columbus-energy-resources-shares/news/when-will-columbus-energy-resources-plc-loncerp-breakeven/
When Will Columbus Energy Resources plc (LON:CERP) Breakeven?
Simply Wall St October 16, 2019
Columbus Energy Resources plc’s (LON:CERP): Columbus Energy Resources plc engages in the exploration, development, and production of oil and gas in Trinidad and Tobago, Spain, Cyprus, St Lucia, the United States, and the United Kingdom. With the latest financial year loss of -UK£3.1m and a trailing-twelve month of -UK£2.3m, the UK£35m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on CERP’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for CERP’s growth and when analysts expect the company to become profitable.
According to the 2 industry analysts covering CERP, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of UK£3.5m in 2021. Therefore, CERP is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, I calculated the rate at which CERP must grow year-on-year. It turns out an average annual growth rate of 119% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for CERP given that this is a high-level summary, though, take into account that generally oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one aspect worth mentioning. CERP has managed its capital prudently, with debt making up 2.3% of equity. This means that CERP has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.