They certainly miss the downstream earnings that the integrated companies can fall back on. That being said, it has more upside potential if the price gets hammered into the 20s. However, the longer they have to decrease their capex, the less reserves they have going forward.
I bought ITUB fall 2015 @ $6.13, think it is bottoming around $6. Just bought IBN, largest Indian bank, just below $6. These are respectively the largest private banks in Brazil and India, both well run. What better way to play a future turnaround in the most transparent BRIC countries, when both stocks are extremely out of favor?
As always, with what I term loosely "internet journalism", you must do your own due diligence. There is no harm in reading all of these articles, you just have to realize what angle they are coming from, how much is actually fact versus self conjecture, and go from there. I love reading Cramer, Marc Faber, any and all of them.
Just use their "information" prudently. They sometimes do contain data which you would not have seen elsewhere. Or you can use them as contrary indicators if you see evidence it works, its up to you.
How do you figure that the dividend is "well covered" ?! They made .55 this quarter, and the dividend
is .63. Going forward analysts estimates for many future quarters are under the .63 dividend.
The dividend increase last November could go down as one of the most ill-conceived, worst timed decision
by management and the BoD.
Lol if you think that $30 oil for any length of time means pain is over for CVX you are hallucinating. The downstream side can only do so much for the bottom line.
They will be hard-pressed to make the $1/sh in 2016 listed in Yahoo Analyst Estimates.
That being said, there are only two things longs need to believe in and have happen to make
a good return on NE in a few years: 1) NE has the financial strength to survive this sub-market
depression- cash, debt service, cut dividend, anything and everything; and 2) the oil market has
another long up-cycle in it after the this depression. Consistently rising prices, supply and demand
flipped from current scenario, alternate fuels still not fully viable and gaining market share.
True, but who knows what covenants they have on all this various debt, including lines of credit. It is not as cut and dried as you think. However, if they are able to sell off some assets at minimal losses to raise cash I believe they can avoid BK- they better last at least to 12/17 so I can exit my position in their 11/17 notes at a profit...
CVX cut their dividend in half 2 quarters in a row in 2004. If they want to keep some semblance of a continued long term play, they may do something similar- maybe 2 quarters of "special" cuts than back to at least status $4.28, if not a few pennies over.
Tried to catch it lol, started long @ $32.29 and now again at $24.03. Dreman, one of my favorite contrary
value guys, liked it in Forbes last week @ $28. HSBC says it may cut dividend- yet still has it as a buy,
and it is down over 4%. I say, like many of the oil driller stocks getting pummeled, that a dividend cut would
be a positive. Cut in in half, save some cash and credit ratings. Instead of 8% it would be a 4% at these prices, still respectable.
This move has little to do with Mr. Walsh. Look at all the competitors, all the commodity metals miners worldwide- they are all down. One question for Mr. Walsh now is- what will the dividend be going forward?
Quite well thank you. Give NE props for reviewing and adjusting dividend in a timely fashion. They lowered it when it needed to be lowered, based on a couple years projections of cash flow needs. If things don't pan out in the next year, I believe they will act again and cut it entirely. Could help to keep the bottom from falling out of the stock price and excess volatility.
Felling ok- just started a small position @ $10.22/sh, been struggling on which driller to buy. Current prices all seem to be based on debt levels and maturities. DO is best in this category, but also has gone down the least and thus has less upside. Other small fry- ATW, PACD- might not have the staying power to repay debts. Ditto RIG and SDRL, who are very good operators but have a lot of debt coming due in next 3 years. Hence, I decided the middle road- NE.
lol good thing I am db333p, not that shill no-nothing db33p. So you are the glass is half full, not half empty type, fine. In the last few months, a few competitors have entered into new contracts- at substantially lower day rates than their previous contract. What does your crystal ball say all these new contracts will be negotiated at in 2016, if in fact they get done at all?
Finances? ok, $656m notes not due until 2020. Fleet age? good, overall one of newest fleets among competitors. Fleet Status? OUCH, seven of 11 drillships contracts end by November 2016. Many of those contracts to lesser known companies that will have to reduce cap-ex with lower oil prices and highly unlikely to extend. So, unlike many competitors, visible backlog will not just slowdown- it will almost come to a halt. I am trying to like ATW long as a bottom-feeder in oil markets due to first two factors, but the last one gives me pause.
Your points regarding a few percentage points difference between supply and demand balance have some validity in history. However, your assumption that is would boost prices to near 100 is wishful conjecture.
I use Fidelity. You can search fixed income bonds- however the lowest rating they will let you search is BBB-, I do not know how you would find or trade individual lower rated junk bonds.
Staying away from the common, no dividend in sight, BK a small possibility. Bought some 2.3% notes duw 11/17 at $84 for an 11% YTM. This is the first tranche due in a series of hundreds of millions of notes, figure they have a very good chance of at least surviving 2 years with this being one of the first pieces of debt coming due. Good luck to all you longs on the common.
My patience wore thin lol. Sure it could go down more from here. I just started a small position at $86.50/sh, where it has a 4.5% yield and forward PE of under 10. I will dollar cost average down on at -15% ($73.50) if it gets that low.
The current dividend is $4.28/sh. Earnings for 2015 will be about $3.35/share. Yahoo consensus analysts say 2016 earnings E$3.50/share. 2017- who knows, but if oil prices do not recover much, appears neither will earnings.
So, that is $ .78 in 2015 and $.93 in 2016 out of pocket. Is it really worth defending the existing dividend at the expense of stripping investment for the future, or incurring more debt? A 30% dividend cut to $3 per share for 2016 would ensure full coverage of the dividend, and still have an above market yield of 3.3% at $90/sh. When the oil market and earnings recover, the board can increase it to $4.28 per share or more.