Royal Dutch Shell (RDS.A) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 1%. By the end of trading, Royal Dutch Shell fell $1.96 (-2.8%) to $68.95 on heavy volume. Throughout the day, 4.2 million shares of Royal Dutch Shell exchanged hands as compared to its average daily volume of 1.7 million shares. The stock ranged in price between $68.95-$69.64 after having opened the day at $69.39 as compared to the previous trading day's close of $70.91. Other companies within the Basic Materials sector that declined today were: Quaterra Resources (QMM), down 19.1%, Pure Bioscience (PURE), down 10.2%, Mexco Energy Corporation (MXC), down 9%, and Houston American Energy Corporation (HUSA), down 8.3%.
Royal Dutch Shell plc operates as an oil and gas company worldwide. The company explores for and extracts crude oil and natural gas. Royal Dutch Shell has a market cap of $224.56 billion and is part of the energy industry. The company has a P/E ratio of 8.9, below the S&P 500 P/E ratio of 17.7. Shares are up 2.3% year to date as of the close of trading on Friday.
TheStreet Ratings rates Royal Dutch Shell as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
I was reading Worden report that Mark Hullbert said that his data are showing pattern of corporations insiders, doing insider selling of their stock that could be indicative that correction is possible near term. RD insiders maybe the first the among them ( that is smart). My thoughts are, IF market corrects soon, RD could find itself in the $64-60 area. Why? at the ratio that RD drop vs. energy sectors and other majors is almost 7 dollars vs. 3 dollars against other majors. It is almost like looking out the window comparing feather (other energy stock) flutter down while RD (the rock) drop faster down. What an analogy. If the market correct, look for RD to down to $60 (maybe). Do you think its far fetch?
I was going to get back in when RDSa reached 68. But, it blew by 68 like a freight train so we may see much lower levels. Don't think we'll get down to the 60 range before I get back in but 65 might be on the horizon if there is a 5-6% market correction. We'll just have to stay nimble ......
I don't know how to read the tea leaves but $60 sounds reasonable to me. I'm 100% cash so i feel pretty good for now. Hope everyone is enjoying the same position. Oh the tea leaves is from one of the long time posters here, not mine but a good one to use when u are inexperienced as i am. GLTA and Happy Mardi Gras to all.