New Value Analysis of Zenith Energy Ltd (LSE:ZEN)

Published by Studio 61 Wealth Management at 17th September 2017

Zenith Energy Ltd Screen Shot 2017-09-17 at 12.36.51

New Value Analysis of Zenith Energy Ltd (LSE:ZEN)

A new value analysis of Zenith Energy Ltd (LSE:ZEN), a company listed on the London Exchange, has been added to our research pages here. Zenith Energy Ltd is in the process of transforming from a company with the majority of its assets in Argentina and Italy to a company focussed on production of oil in Azerbaijan. Zenith is keeping its oil, gas and electricity assets in Italy.

The first point to note is that ZEN fails all the value investor test except one. Defensive value investors should not consider an investment in ZEN common stock. ZEN is only appropriate for more enterprising value investors as part of a diversified portfolio.

Just to clarify ZEN fails the following tests.

Not conservatively financed
No dividend record
No earnings growth and makes an operating loss
Not significant size in an industry where there are good value large companies

ZEN does have one interesting value statistic relating to the relationship between the share price and the Net asset value of the company. On this one statistic ZEN is definitely cheap. You can find more details on this in the chargeable report.

It should be noted that ZEN has just raised £252,000 by issuing of 3,600,000 new common shares at a price of £0.07. You can see the news release here.

The issue of shares was made after the research for the chargeable report was complete. The issue of new shares slightly alters the relationship between market capitalisation and net asset value, but is not significant to the analysis in the chargeable report. ZEN remains extremely cheap in comparison to net asset value.

To find out about why more enterprising value investors can consider an investment in Zenith energy Ltdc common stock click here to download the new analysis.

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