Vaalco Energy Inc. (EGY) is a Magic Formula stock that offers low downside risk with their production and reserves in offshore Gabon and offers asymmetric upside with their prospects in Angola. There is also potential in their new Block P in Equatorial Guinea as well as their onshore Gabon Mutumba Iroru Permit, but I am going to ignore those assets for purposes of keeping this article simple. Let's look at the downside protection first.
$102.6 million of unrestricted cash with no debt.
The company states that they have approximately $75 million in discretionary cash flow per year.
12/31/12 SEC Standardized Measure of Discounted Future Net Cash Flows for proved reserves = $150
Only subscribers can access this article, which is part of the PRO research library covering 3,575 different stocks.
Growing numbers of fund managers and other investment professionals subscribe to Seeking Alpha PRO for equity research that is unavailable elsewhere, so they can: