well, i definitely must have confused the tone of
"i am worried that gas prices
could go down"
I am too. If it does, the
companies which hedge are the ones who wont get completely
burned. Like I said in my previous post, you can make a
case for BR being a longterm value here with $2.75 -
NG fundamentals are pretty solid
right now. There simply arent enough physical rigs
and/or people to immediately make up for the supply
shortfall. A hot summer will make it difficult to have any
sort of build. Watch the injection numbers in July and
August --- those should be an indicator as to where
we'll stand come November.
"i have been burned
lately and am very advers to risk"
On natural gas
or on tech stocks?
I dont follow UCL. I
researched it and decided not to invest but cant remember
exactly why. My e&p holdings are:
Safe -- SFS,
Medium -- DNR
Super high risk -- PANA, AXAS
the high prices hold through winter, the latter two
should see 4x gains or more.
"when more people
like me start to enter the gas shares will start to go
like the tech shares."
The big up move will
come when a full sector rotation occurs, if it does.
This will mean people switching 401K funds into e&p
mutual funds. Which will take awhile because I doubt all
401K plans even offer e&p funds. (Mine doesnt, but has
promised to remedy that.) In this scenario, it is the
large caps that will really win because the mutual fund
money wont go into illiquid stocks.
from here in a report today.
They like BR,
EOG, APC, UCL and many others.
I think UCL is
attractive BTW. Alex Brown says they may have some good
exploration news in the second half. AB also says BR is
sorry if you confused the tone of my message. i
am not slammng br. this is the share that most
analyst are recommending because of its size (good for
portfolio managers) and current price. i am not "hyping"
BSNX i am just looking for advice. i liked the graph
and they look like even with the reductions in output
they will still make at least $28m this year with a
market cap of $300m. that is not a bad p/e but it seems
that they have a history of not meeting their targets
which is a risk. i am worried that gas prices could go
down, which is the risk. but it seems that everyone
seems to think that a definite gas shortage will begin
on nov 1. i have been burned lately and am very
advers to risk so i almost try to talk myself out of
things even if the odds are they will be aq goood
investment. the bloomberg.com/energy site quoted futures
dealors as saying that the price will keep going up, it
is almost a certainty. the only problem is when in
the past when i have heard experts say these things
the opposite usually happens.
i will probaly
buy br as it has liquidity and i can set a stopp loss
that will be executed. some of these other oil and gas
shares that i have heard recommened trade 10000 shares a
day. not the sort of secnario i enjoy if trying to
maintain peace of mind. what do you think of UCL. they
seem to have fairly regular earnings that are growing.
most of the gas shares seem to be moving sideways. but
there is alsono volume in themarket at all. when more
people like me start to enter the gas shares will start
to go like the tech shares. i hope.
"as i am now 3 days into my education of gas
companies i am beggingin to understant that ths business is
a complete gamble"
3 days of education? Wow,
you must be an expert by now.
btw, its AGA,
not APA. Prices "collapsed" to $4 MCF which is
roughly $.75 higher than the basis most analysts are
using when determining their targets.
last week was 78BCF. This was lower than last year, as
well as the three year and five year
IMO, BR is fairly valued using $2.75 NG as the basis.
Anything higher will be gravy. It would require an
absolute collapse in NG prices for BR to fall
significantly. I'm perfectly willing to accept that risk, as it
would require some really odd weather to allow this to
Its also quite funny that you are slamming BR while
hyping BSNX. BSNX has missed production targets
consistently. They just announced their latest qtr would be
significantly under production estimates. Your logic that BR is
a bad investment because NG prices would fall
applies much more to BSNX which would see this fall
accompanied by lower production.
I suggest you take a
closer look during day 4 of your class.
i went to the bloomberg.com/energy site and it
seem the futures prices collapsed on thursday because
the apa report said that inventories were way higher
than analyst predicted. funny but maxwells whole
thesis is that prices will go way up (same price as you
mentioned $6-$7) because of an inability to get inventories
up. the futures did rise on friday as it appears
people are expecting a hot summer and maybe sotrims in
the gulf that will cause problems with gas production
(good for prices but not much use when you cannot
produce your product to sell). as i am now 3 days into my
education of gas companies i am beggingin to understant
that ths business is a complete gamble. you will be
either right or wrong, but the decision is up to mother
nature and you have no clue what she will do. the thing
is i like taking a bet. i have looked at many of the
big companies and have also noticed a smaller cap
company called basin exploration. it has been a bit
slammed in the last week but it recovered and the chart
looks good. if the prices go up the p/e will be less
than 10. what is a reasonable p/e for gas companies or
does it matter with the huge changes in the prices of
gas (that cannot be predicted). what do you think of
bsnx. it seems maxwell says stay witht the big boys as
they are the ones the funds will but into if the price
of gas keeps going up. oh ya one banc downgraded
bsnx this week but also upped their eps for the year.
Most other companies have settled this lawsuit
for a small amount that did not negatively affect
their stock prices.
Therefore we should assume
that BR will get screwed by a huge and unfair
Perfect logic - for a short...