Terry:
I am aware of these ratios and the debt for this company. I also know that this company holds mineral leases in prime areas of the Basin and I feel that they know how to produce these areas to the maximum potential. I have a friend who is renowned in the oil and gas trading and forecasting business and he informed me that he has also bought stock in this company. My friend’s company does extensive evaluations of the various shale plays including the Eagle Ford, Haynesville, Barnett, and Niobrara. I am no investment guru but I did retire from the oil and gas industry and I like what I see in this particular company.
Terry Petersen said:
Charles,
I’ve been looking at investing in 3 or 4 companies in the Bakken. I have read all kinds of positive things about Brigham and would like to invest in them. However running the ratios I find that their PBR is 4.67, they have a fairly high debt to asset ratio, low sales revenue per share, and the ROI is below average. Other ratios such as debt to equity, working capital, sales to revenue, and PEG ratio are better than average. And if I were to buy based on returns, as you say, this company has done very well in the past.
You may be correct on your observations but I guess I’m thinking they might be kind of risky compared to other companies. (Their BETA is 2.85)
I would like to buy a few shares of Brigham but need to be sold more as to why I can make some money on them. I will investigate their company management further, but would you still recommend them based on the ratios above? Or did you already use ratios in your research of various operators?