One of the most rewarding things about writing about stocks is when
you write a piece, make certain specific predictions, and then see those
come to fruition. In contrast, one of the most frustrating things is to
have a piece all lined up and ready to go and then see one of your big
predictions come true before your piece gets published. That has
happened to me now on OMV (OMVKY.PK), as the company announced Monday that the company had reached a potentially transformative $2.7 billion deal with Statoil (STO).
The
good news is that my basic thesis on OMV still holds - OMV looks like a
significantly undervalued European energy major with catalysts to drive
better performance in the coming years. Not only does the acquisition
of North Sea assets from Statoil significantly improve the odds that the
company will meet its long-term production growth goals (something the
Street was incredibly skeptical about), but OMV remains a strong free
cash flow-generating major with a low breakeven price and capacity for
additional farm-ins as circumstances allow. All told, I believe these
shares should trade more than 30% higher than they do today.
Please read more here:
OMV's Transformation Should Unlock Meaningful Value
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