NasdaqGS:TGA

Stock Analysis Report

Executive Summary

TransGlobe Energy Corporation, together with its subsidiaries, engages in the exploration, development, and production of crude oil and natural gas in Egypt and Canada.

Rewards

Trading at 71.6% below its fair value

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of -47.9% per year for the next 3 years

High level of non-cash earnings

Unstable dividend track record

Does not have a meaningful market cap ($87M)



Snowflake Analysis

Undervalued with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has TransGlobe Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TGA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.8%

TGA

-1.3%

US Oil and Gas

0.06%

US Market


1 Year Return

-39.6%

TGA

-19.5%

US Oil and Gas

19.4%

US Market

Return vs Industry: TGA underperformed the US Oil and Gas industry which returned -19.5% over the past year.

Return vs Market: TGA underperformed the US Market which returned 19.4% over the past year.


Shareholder returns

TGAIndustryMarket
7 Day-0.8%-1.3%0.06%
30 Day-9.0%-10.1%1.1%
90 Day7.0%-7.0%8.9%
1 Year-36.8%-39.6%-16.3%-19.5%21.9%19.4%
3 Year-22.8%-26.9%-13.3%-21.4%48.9%39.3%
5 Year-52.5%-57.8%-22.4%-33.8%71.9%53.1%

Price Volatility Vs. Market

How volatile is TransGlobe Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TransGlobe Energy undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TGA ($1.2) is trading below our estimate of fair value ($4.22)

Significantly Below Fair Value: TGA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TGA is good value based on its PE Ratio (2.5x) compared to the Oil and Gas industry average (8.9x).

PE vs Market: TGA is good value based on its PE Ratio (2.5x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: TGA's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: TGA is good value based on its PB Ratio (0.4x) compared to the US Oil and Gas industry average (0.8x).


Next Steps

Future Growth

How is TransGlobe Energy forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-47.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TGA's earnings are forecast to decline over the next 3 years (-47.9% per year).

Earnings vs Market: TGA's earnings are forecast to decline over the next 3 years (-47.9% per year).

High Growth Earnings: TGA's earnings are forecast to decline over the next 3 years.

Revenue vs Market: TGA's revenue is expected to decline over the next 3 years (-7.9% per year).

High Growth Revenue: TGA's revenue is forecast to decline over the next 3 years (-7.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TGA's Return on Equity is forecast to be low in 3 years time (7.1%).


Next Steps

Past Performance

How has TransGlobe Energy performed over the past 5 years?

13.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TGA has a high level of non-cash earnings.

Growing Profit Margin: TGA became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: TGA has become profitable over the past 5 years, growing earnings by 13.8% per year.

Accelerating Growth: TGA has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: TGA has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-10.9%).


Return on Equity

High ROE: TGA's Return on Equity (15.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is TransGlobe Energy's financial position?


Financial Position Analysis

Short Term Liabilities: TGA's short term assets ($71.4M) exceed its short term liabilities ($24.3M).

Long Term Liabilities: TGA's short term assets ($71.4M) exceed its long term liabilities ($66.7M).


Debt to Equity History and Analysis

Debt Level: TGA's debt to equity ratio (18.8%) is considered satisfactory.

Reducing Debt: TGA's debt to equity ratio has increased from 15% to 18.8% over the past 5 years.


Balance Sheet

Inventory Level: TGA has a high level of physical assets or inventory.

Debt Coverage by Assets: TGA's debt is covered by short term assets (assets are 1.7x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: TGA is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: TGA is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is TransGlobe Energy's current dividend yield, its reliability and sustainability?

5.74%

Current Dividend Yield


Dividend Yield vs Market

company5.7%marketbottom25%1.4%markettop25%3.7%industryaverage4.6%forecastin3Years4.1%

Current dividend yield vs market & industry

Notable Dividend: TGA's dividend (5.83%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: TGA's dividend (5.83%) is in the top 25% of dividend payers in the US market (3.7%)


Stability and Growth of Payments

Stable Dividend: TGA has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: TGA has only been paying a dividend for 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (14.5%), TGA's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TGA's dividends in 3 years are forecast to be well covered by earnings (20.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure


CEO

Randy Neely (53yo)

1.1yrs

Tenure

US$1,194,883

Compensation

Mr. Randall C. Neely, also known as Randy, CPA ("CA"), CFA, ICD.D., has been President and Chief Executive Officer of TransGlobe Energy Corporation since January 10, 2018 and January 1, 2019and also its Di ...


CEO Compensation Analysis

Compensation vs Market: Randy's total compensation ($USD901.13K) is above average for companies of similar size in the US market ($USD519.76K).

Compensation vs Earnings: Randy's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Randall Neely
President1.1yrsUS$1.19m0.28% $240.0k
Edward Ok
VP of Finance & CFO2.1yrsUS$694.00k0.063% $54.7k
Geoffrey Probert
VP & COO0.9yrsno datano data
Marilyn Vrooman-Robertson
Corporate Secretary3.1yrsno datano data

1.6yrs

Average Tenure

Experienced Management: TGA's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Randall Neely
President1.1yrsUS$1.19m0.28% $240.0k
Ross Clarkson
Non-Executive Director24.3yrsUS$1.35m2.55% $2.2m
Steven Sinclair
Independent Director2.9yrsUS$135.00k0.069% $60.0k
Carol Bell
Independent Non-Executive Director1.1yrsno datano data
Susan MacKenzie
Independent Director5.8yrsUS$137.50k0.021% $18.0k
David Cook
Independent Chairman of the Board0.8yrsUS$130.00k0.14% $124.6k
Edward LaFehr
Non-Executive Independent Director0.9yrsno data0.021% $18.0k

1.8yrs

Average Tenure

59yo

Average Age

Experienced Board: TGA's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: TGA insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

TransGlobe Energy Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TransGlobe Energy Corporation
  • Ticker: TGA
  • Exchange: NasdaqGS
  • Founded: 1968
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: US$87.050m
  • Shares outstanding: 72.54m
  • Website: https://www.trans-globe.com

Number of Employees


Location

  • TransGlobe Energy Corporation
  • 250 – 5th Street SW
  • Suite 2300
  • Calgary
  • Alberta
  • T2P 0R4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TGANasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDJan 1980
TGLTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1980
TRPDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1980
TGLAIM (London Stock Exchange AIM Market)YesCommon SharesGBGBPJan 1980

Biography

TransGlobe Energy Corporation, together with its subsidiaries, engages in the exploration, development, and production of crude oil and natural gas in Egypt and Canada. The company holds an interest in five production sharing concessions, including West Gharib, West Bakr, South Alamein, NW Gharib, and South Ghazalat, Egypt; and owns production and working interests in facilities in the Cardium light oil and Mannville liquid-rich gas assets in the Harmattan area of west central Alberta, Canada. TransGlobe Energy Corporation was incorporated in 1968 and is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:05
End of Day Share Price2020/02/19 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.