The Razor's Edge

2-Year Price History

A Word Of Caution

BPZ Resources, Incorporated (BPZ) has experienced a very significant loss in market value recently. Clearly this drop in price will have an impact on the valuation but the recent events that caused the drop may have not been fully factored into our analysis yet. When a stock loses value very quickly it could be a sign that there is a fear of bankruptcy.

Of course, you may proceed to review our research report for this security, but please be aware that our model may not reflect significant factors surrounding this company.

Therefore, (and as always), check additional sources and available information regarding BPZ before making an investment decision.

Ockham's Rating

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BPZ Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at BPZ through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 10.48x and 1.59x respectively.

Utilizing this range we can see that BPZ’s current Price to Sales per share ratio of 1.40x is significantly below its average levels historically. In fact, with a current price of $6.51, BPZ is a full 77% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for BPZ.

BPZ Cash Earnings

Price to Cash Earnings analysis is inappropriate for this company due to an insufficient positive cash earnings history. Rather than calculating a potentially misleading Price to Cash Earnings analysis, we have chosen to give BPZ a neutral Price to Cash Earnings outlook at this time. However, we should point out that this metric is a significant element in Ockham’s methodology to analyzing the outlook for any company. Therefore, for BPZ, our assessment is now more dependent on the Price to Sales analysis, and investors should be cautious with a company with very limited, if any, positive cash earnings.

BPZ Dividends

While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company. While we do like to see companies with healthy and growing dividends, it is not appropriate for all companies, especially those focused on growth. We regard BPZ as neutral in terms of dividends because they have no history of paying a dividend and continue to reinvest that money for growth purposes.