Harvest National Resources: Low Risk, High Uncertainty Situation

Harvest Natural Resource (HNR) is a company which I took notice after relatively well known value investor Mohnish Pabrai began filing that he was taking a big stake in the company. I bought the stock last week in the $10 range and out of luck of timing Harvest jumped up 37% today.

The reason for the large increase?

Harvest Natural Resource today announced the Venezuelan National Assembly has approved the formation of mixed company Petrodelta, S.A. and the direct award of three additional fields to Petrodelta... An 80 percent owned Harvest affiliate will own 40 percent of Petrodelta and Corporacion Venezolana del Petroleo S.A. [CVP] will own the remaining 60 percent.

(source)

A good analysis of the company can be found at Value Vista and a good write up on Parai's investment in Harvest can be found her via Guru Focus.

Overall, Harvest would probably be described by Pabrai by his principles "Low risk, high uncertainty situation" and "Heads, I win! Tails, I don't lose that much!" which can be found in his book The Dhandho Investor.

HNR 1-yr chart:

Comments

[DaveinHacke...:]

How is HNR low-risk when there is such obvious political risk in Venezuela? There are better oil places with less (or even zero) political risk.

2008 Apr 20 03:17 AM