Profit from Natural Gas

Terra Energy (TSE:TT) is a natural gas producer trading below its PV10 – the discounted future expected cash flows from flowing gas reserves, after expenses – a great way to profit from increases to the price of natural gas then. I test the assumptions underlying the PV10 calculation to assess the downside.

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Joy Global (NYSE:JOY)

Joy is one of the largest global manufacturers and servicers of high productivity mining equipment. It sells both new equipment (40-50% of sales), and parts to repair and upgrade existing equipment. Coal and resource stocks haven’t been doing well lately, and naturally, neither has Joy. It now trades a P/E ratio of 10.6 but still has a return on investment of 14% in a depressed market.

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