Your analysts had more great things to say about oil and good old NOV. Another rout! The good news is you know you'll find the bottom faster when a stock drops like a rock! NOV really is at the epicenter of the drilling slow-down but CS was getting draconian in its outlook if you ask me. Down $33 and maybe only another $10 to go! Glad I only bought a few tiny nibbles so far!
Same for me, tiny bites at 59, 57 and 55 - the smaller the nibbles the better. My fingers always get a little bloody trying to buy a falling knife. OPEC has engineered an oil smack-down and NOV and drilling rigs are at the epicenter of this smack-down. This estimate cutting, rig count cuts, and weak oil prices all create a huge negative feed-back loop that could continue for a while. These things tend to last longer and go farther than most expect. Fear is rampant right now. Good Luck! You won't need it if you can be patient and not let emotions take over.
It all depends on how long oil stays this low. With summer driving season and the June OPEC meeting, I suspect a recovery in oil prices gets under way by May. NOV obviously experiences a drop in biz in the first half of 2015 and the stock could slide to $50 or below, but it probably ends up being a temporary drop. Wide moat with low debt that can easily weather this storm means you slowly accumulate at these low valuation levels.
What? OPEC (Saudi Arabia and its allies) has no intention of cutting production at this time. They are using every opportunity to drive down pricing in oil spot market. They might very well wait until June (their next scheduled meeting) to cut production. With summer driving season and OPEC meeting we probably bounce by April/May on speculation of an OPEC cut and strong seasonal demand. For the next month or two, I think there is close to zero chance of an OPEC cut. Capex budgets are getting cut left and right, and that's what OPEC wants. No more drill, baby, drill for a while.
Always going to be speculative future value of real estate on the books at cost which is far less than actual value. Your same arguments could have been said six months ago when the stock was at $26+ and now its at $16+. The market has swung this stock around mostly between $14 and $26 for years now, with $20 being the mid-point. I expect the market continues to swing this thing around this range. The large net cash balance means St. Joe has a future of more speculative ups and downs based on the estimated value of its real estate.
when the stock gets pounded like it has been recently. The value of the real estate and huge surplus cash balance gets discounted too much down here. Bought some yesterday near 16 1/4 to start a position.
NOV is THE oil rig equipment company with a dominant position. I figure OPEC will wait until their June meeting to cut production. They want capex budgets to get slashed, and they are being cut left and right. This is bound to pressure NOV for the next six months, but I think oil prices manage a modest recovery in the second half of 2015. NOV has already been whacked and it could slide some more, but its in my accumulate zone and I am buying small blocks on weakness since the break below $60. It could break $50 again, but I have real trouble seeing the $30s. Long-term, NOV goes over $100 imo, but there is very little 'help' until OPEC decides its punished the marginal players enough and cuts production quotas. That may not happen before their June meeting. Tough sailing for now as estimates probably continue falling for a while. Just with the sell-down since September, NOV is already trading at book value and at only ten times 2015 estimates. Its already looking cheap, but we know sell-offs can make cheap prices even cheaper for a while. Estimates will probably see more cuts over the next quarter.
When OPEC tries to drop prices and we get waterfall selling, its hard to step up to the plate. The extreme selling will let up at some point, but its best to be a little late and wait while longs get squeezed out. This selling and glut will last as long as OPEC wants it to, and that could be for at least another couple months. Live to fight another day might be the best approach for now. The good news is that when this thing bottoms, it will be a buy for more than a bounce. Steep sell-offs lead to long recoveries.
The gamblers do not define price moves higher and lower, they just magnify them. The long hedgies have seen a huge squeeze develop but half of 'em still haven't cried uncle yet. The Saudis can play this game of chicken longer than anyone else can and they have a full court press on exploration and production budgets for the US frackers and the global industry cap ex budgets. The HUGE price drop from $108 to $48 and change is enormous but will end up looking temporary on a price chart. It could go to $40 first, but it'll be higher once the Saudis decide they have inflicted enough damage to industry capacity and decide to cut production a little via OPEC cuts. They are forcing industry discipline with way far way fast price drops that disrupt and decimate weak players. Next time they suggest cutting production with OPEC (and Russia), they wil get cooperation instead of lip service. This drop ain't over until the fat lady sings!
you will end up with bloody hands trying to catch this falling knife. The advantage of watching Saudi Arabia torpedo prices is you can sit back and watch the war and patiently wait for prices to stop falling. Then higher prices become a lay-up proposition. Right now its ugly and getting worse.
That was fast! Maybe we even look for $40. The Saudis want oil to drop like a rock here in the US - I wonder why? Perhaps too much fracking from frick and frack. Big cap ex. spending cuts coming for the industry and especially shale oil. The Saudis want exploration & production budgets slashed big time, and odds favor them with oil at 50 bucks a barrel!
when it waterfalls lower like it has been for six months. Long hedgies have been getting smoked, and they still are long, but not as long. They have been getting creamed and forced out. There is a inventory and supply glut, and OPEC / Saudis are forcing the issue by refusing to cut production. They want to see US shale fracking slow down. They want big production and exploration budget cuts and they're getting them. It starts getting ugly down below 50 buck barrels. The last commodity standing has fallen. No bail-out by OPEC this time.
Its amazing, but the perma-bulls on oil have not closed out but half their positions yet. Meanwhile, oil has fallen in half! The shake-out continues, and there is blood in the Streets! Saudis want to blow up prices real fast and they are doing it. The good news is that the sell-off at some point winds down because oil runs out of room to keep falling. 2008 saw an epic fall in oil followed by years of increasing prices. Now we're hitting the re-set btton on low prices. In for a tiny stake here, but ready to buy in size when a bottom is found.
That's why GG is the only big gold miner worth owning. It has the best balance sheet and margins to survive the gold price declines much better than the industry. The industry sucks so for better downside protection you go with the best mines, balance sheet, and margins, and that's GG. The industry probably has another difficult year in 2015, but GG will get good bounces from time to time. Its a survivor!
Russia has been building gold reserves for some time now. Not sure it really matters. I think year-end window dressing and tax loss selling has been in play recently like last year. We might very well see at least a bounce develop in January/February for gold and silver, even if it does roll over again. Oil dropping like a rock is a bearish sign and the strengthening dollar is bearish, but I think we'll at least get a bounce from these over-sold levels. Nothing moves in a straight line for long and the miners are all getting whacked. Eventually production will slow, but that takes time.
Its a great time to buy PSLV versus SLV. Typically we see a up to a 5% premium on PSLV and once in a while a tiny discount. I just switched from SLV to PSLV. When a significant premium to PSLV returns, I'll switch back to SLV. PSLV is a better mousetrap than SLV but they both track spot silver. With PSLV being a closed end fund, though, market makers don't issue new shares when a premium occurs. Of course, a significant discount won't occur because market makers can liquidate a basket of shares for the physical silver. PSLV is also unallocated and segregated silver kept at the Royal Canadian Mint. Tax advantages can also accrue.
Hopefully they win again on the pitch today - they're on a roll and its getting interesting! Go Red Devils!