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Broadridge Financial Solutions, Inc. Message Board

  • long_or_short_of_it long_or_short_of_it Jun 21, 2000 6:33 PM Flag

    I hope everybodt took note in what gas

    did today. It rocketed up across the strip.

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    • Industry injected 64 BCF of gas. Much lower than
      most analyst expected. Year over year deficit is
      getting very worrisome. Running out of time to get gas in
      storage for winter. It is now physically impossible to
      fill storage up. If numbers don't improve, we will be
      500 to 750 BCF short by October. With oil inventories
      low, fuel switching not very likely without further
      pressure on oil prices.

      Anybody doubt that an
      energy crisis is emerging??

      If you live in
      Chicago, stock up on blankets. It will be awfully cold in
      January when we are out of storage gas.

      • 3 Replies to aggiebasher
      • From all of the political rhetoric I am hearing,
        I think some of the people that matter are starting
        to get concerned. Unfortunately, a search for a
        scapegoat seems to be the current mode of operation. I
        honestly thought that we would be catching up on
        injections by now.

      • flow estimate on BR yesterday. They rate BR a 1
        with a nine month price target of 55. BR is on F U's
        Analyst Action List.

        They rised the 2000 cash flow
        to 6.95 per share from 6.32. They are leaving 2001
        essentially flat at 6.39.

        In Q3, BR has approx 35% of
        its natural gas hedged at 2.50 per Mcf and in Q4
        approx 22% hedged at 2.50.

        Now, lets talk about
        their modeling assumptions: they assume natural gas
        reference price of 2.75 per Mcf at Henry Hub and crude at
        23 per barrel. They state that for every ten-cent
        change in price of natural gas in 2001, BR's cash flow
        changes by about $.30 per share and for each dollar
        change in the price of a barrel of crude, the cash flow
        changes by $.14 per share.

        If the current spot
        price for ng of $4.05 per Mcf and spot for crude of
        $31.69 was used, BR's 2000 estimated cash flow would be
        approximately $5 higher.

        For valuation purposes, BR is
        being valued on cash flow and has historically sold for
        5 to 12 times cash flow. The nine month target of
        55 is 7.9 times estimated cash flow per

        They comment BR has been a laggard to their peers,
        perhaps because they have been terrible in deepwater
        exploration (zero for nine).

        My comments: The increase
        in the exploration budget may well have brought
        selling based on their track record. The good news to me
        is the increase in the budget should be comfortably
        carried by the additional cash thrown off by the
        favorable pricing environment. However, with every other
        peer achieving some degree of success in exploration,
        in my view a success in this area will go a very
        long way, as I believe failure is built into the
        market price.

      • I sold at $39 5/16 ?

    • It is stronger than goat's breath. Even I am
      starting to become more of a believer. Note - I said
      "more". Added some more EOG today as it didn't have the
      price action of BR. Probably just consolidating near
      it's all time hi.

51.80+0.15(+0.29%)Jul 2 4:02 PMEDT