PVL Intrinsic Value – Investors Should Exercise Caution When Considering Permianville Royalty Trust Despite Its Reasonably Valued Stock in 2023
March 18, 2023
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Investors should exercise caution when considering Permianville Royalty Trust ($NYSE:PVL) (PVL) despite its reasonably valued stock in 2023. The company’s reduced monthly distribution due to the collapse of the natural gas price should be taken into account when assessing its value. This reduced income significantly limits the potential return on investment for investors. Furthermore, PVL stock is exposed to additional risks that should be taken into consideration before investing. For one, the company’s operations are subject to external factors such as commodity prices, demand for natural gas, government regulations and political conditions. This unstable environment means that PVL stock is highly volatile and difficult to predict. Additionally, PVL stock faces competition from other oil and gas producers, which may limit its future growth potential. Investors should also be aware of the long-term nature of PVL as a royalty trust. While PVL’s income is reduced in the short-term, it has the potential to rebound in the long-term.
However, this also means that PVL stock is illiquid and can only be sold in certain circumstances. They should carefully weigh the benefits and risks of investing in the company and ensure they understand the implications of their decision. Doing so will ensure they make an informed decision that is in their best interest.
Market Price
On Monday, the stock opened at $2.3 and closed at $2.3, a drop of 6.6% from its prior closing price of $2.4. This drop indicates an overall downward trend in the stock’s value and raises questions about its long-term performance. Furthermore, the current market conditions may render it difficult for the company to increase its stock price significantly in the near future. Therefore, investors should take into account all of these factors before investing in Permianville Royalty Trust. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for PVL. More…
| Total Revenues | Net Income | Net Margin |
| 12.51 | 11.25 | 88.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for PVL. More…
| Operations | Investing | Financing |
| – | – | – |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for PVL. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 61.56 | 0 | 8.3 |
Key Ratios Snapshot
Some of the financial key ratios for PVL are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 5.5% | 4.3% | 87.6% |
| FCF Margin | ROE | ROA |
| – | 0.7% | 11.1% |
Analysis – PVL Intrinsic Value
At GoodWhale, we recently performed an analysis of PERMIANVILLE ROYALTY TRUST to assess its wellbeing. Our proprietary Valuation Line revealed that the fair value of PERMIANVILLE ROYALTY TRUST’s shares is around $6.1. However, the current market price of the stock is only $2.3, which is almost 62.5% lower than its true worth. This represents an incredible opportunity for investors to acquire shares at a significantly discounted rate. More…
Peers
The Permianville Royalty Trust and its competitors, SandRidge Mississippian Trust I, San Juan Basin Royalty Trust, and Kimbell Royalty Partners LP, are all royalty trusts that own interests in oil and gas properties in the United States.
– SandRidge Mississippian Trust I ($OTCPK:SDTTU)
SandRidge Mississippian Trust I is a royalty trust that owns royalty interests in certain oil and natural gas properties in the Mississippi Lime play in northwestern Oklahoma and southern Kansas. The trust’s properties are leased to SandRidge Energy, Inc. and its subsidiaries.
– San Juan Basin Royalty Trust ($NYSE:SJT)
The San Juan Basin Royalty Trust is a royalty trust that owns royalty interests in properties in the San Juan Basin in northwestern New Mexico. The royalty interests consist of overriding royalty interests, production payment interest, and net profits interests. The trust was created in 2001 and is managed by the Royalty Trust Management Company. The trust is currently valued at $495.92 million and has a ROE of 171.02%.
– Kimbell Royalty Partners LP ($NYSE:KRP)
Kimbell Royalty Partners LP owns and operates oil and gas properties in the United States. The company has a market cap of $1.09 billion and a return on equity of 13.95%. The company’s properties are located in Texas, Louisiana, Oklahoma, and New Mexico.
Summary
Investors should exercise caution when considering Permianville Royalty Trust in 2023, despite its reasonably valued stock. Media coverage of the company is currently mostly positive, however, the stock price has recently decreased. Investing in this trust should be carefully considered, as it may not generate the expected returns. Researching the trust’s financials and management history are essential when evaluating the risk of investing in this trust.
Additionally, considering market conditions and potential risks associated with investments in the oil industry should be taken into account.
