The best explaination I heard was the sector rotation crowd wants consumer cyclicals now, selling the resource plays to buy them. No worries with the PGH story, but the stock price may give us a healthy test of the 50ma soon before bouncing higher. On the long range chart, we had overhead supply at the $6.50 range which dictated that we were in for a pull back, I just didn't expect it to be on steriods.
To start with, PGH was and still is overpriced and run by a management group that couldn't manage to get themselves out of a paper bag. There's also way to much oil on the market and these little Co. like PGH get killed when that happens, better hedging may have helped if management knew how to do it. Get ready to see the pps fall way below $6 with an even bigger hit at earnings. It's just the way it is, you can't turn a lemon into a peach.
Nothing going on but profit taking.
Even if energy is following the dollar, the game is still how many dollars a player gains or looses over time, having the dollars then compels where to store or use..
The trade is still to pick up value others have been moved to drop.
The complex relationship between energy and modern life interesting --- supply and demand still rules..
PGH is in the one year price range swing --- down and back, right here ..
china concerns, oil way down, NG glut, CN oil/gas glut , loonie down, all CN E&P getting hit after most have had large run ups in price. pundits are saying $85 WTI.. even cold in US is not helping NG prices, pigs are producing every barrel and btu they can in north america. battle of the low cost producers for sure.
marcellus NG in SW PA Greene County (ala ECT) comes out of the ground cheaper than anywhere in the world except Qatar.. these CN E&Ps were last to the party and 1st to be hit hard, EOG, Cabot, others get a pass for some reason.
Maybe a hedge fund wanted out to raise cash could be a number of things but no news from the company. Still up over 7% in the last month even with this dip.
Hey Bea did you used to own SPB ON Toronto? I still own it your poster name looks familiar. Good company as well.
Sentiment: Strong Buy
Actually it is the price of oil that causes stocks like PGH to swing. Crude is down almost $2 today. When looking at companies like PGH one has to watch the amount it cost them to get a barrel of oil. Then put the cost against the spot price. With the U.S. advancing their oil recovery it should continue to put pressure on oil going forward. We could see crude drop back to $40. As absurd as that sounds, take a look at the last time we got to that level and calculate the product development going on now vs. then and you may even say we may go even lower. Although IMHO before that will happen we will see less fields drilled and supply capped since the companies will not want to sell crude at a loss to their break even price. At that point price will stable and start to move up again. Then as price moves up more supply will come on line and stability will be reached. But I think we are at least 9 months out before we see that. I expect PGH could see the $3's again..., but only for the reasons I have stated above. If that happens a reconsideration of the dividend will come into play, at least until prices recover. Now before you jump all over me and call me a short (I am not shorting this or any stock), I am just giving you the logic behind the movement in oil companies. Take a look at the charts yourself and you will see the correlation between the two.