Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Can Natural Gas Development Drive PetroChina Further?

Having recently gone over the investment prospects for Italy's Eni (NYSE:E) and China's CNOOC (NYSE:CEO), I went into PetroChina (NYSE:PTR) expecting to find another state-owned energy company trading at a discount to fair value. I think that is what I found, though deciding on the "right" EV/EBITDA multiple involves pretty arbitrary decisions of whether to add a half-point here or there that move the fair value quite a lot. I think PetroChina is undervalued today if it can deliver the mid-single digit EBITDA growth that analysts expect, but significant reserve potential has to be viewed in the context of rising production costs and a significant degree of interference from the government at all levels...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details