Ann: Trading Update, page-40

The world is round? Perfectly round?

Come on man, if investing is pure maths and accounting, all those data providers would be Buffett.

Here's my takeaway from Graham's Liquidating Value guidelines:

LV = All assets minus all liabilities with the following adjustments to certain assets under a low or high range scenario:

· LOW: 100% cash; 75pc receivables and other, 50% inventory, 100% land, 15%(PE, intangibles, other nca)

· HIGH: 100% cash; 90pc receivables and other, 75% inventory, 100% land, 25%(PE, intangibles, other nca)

· Note: exclude long term assets held for sale.


Applying that to MRM:





The simple LV would have priced MRM at either negative or zero or at best $0.13/share.

Before the crash, the market has priced MRM at 12 to 13 times reported earnings. The oil crash and MRM's more creative accounting to show massive non-cash losses (and hence get tax returns while paying zero taxes)... that negative reported earnings kind of throw the earnings valuation models out.

So the current market price ranges are just pure guesses and speculation as to what the banks are thinking; how will the oil industry will perform.... But historically, the market has always priced MRM at or above its NTA.

Put these facts together, alone, and it's quite obvious that MRM is a bargain by any measure. And that's not from guesswork or wishful thinking either. Not from mere coding and fancy maths... just common sense.