Cramer was pumping this again! He pumped it hard a few weeks ago when FFIV was at $89 and now it's at $81.50. I agree in that this will continue to slide. Oh, it may get a Cramer bounce for a few days but it'll return to a slide.
One thing looks certain. FFIV will move one way or the other in a big way tomorrow. Place your bets. 2 hours to go.
I was fortunate to pick some up in April at 68 and sell it at 82 in a very short time. If it drops to 68 again I'd find that irresistible and would have to reach out and grab some APA. Unless the oil and gas wells were on fire.
APA will likely trend lower maybe dipping into high 60’s like it did in April. With a sizeable interest in Egypt what happens there does matter and the events haven’t been good. It’s still a ways off from having an impact on operations, but that can change in the blink of an eye. The current battle between the Egyptian military (which currently has the vast support of the people) and Muslim brotherhood looks like there is no foreseeable end in sight. I suspect we’ll see a continued crackdown on the MB and many more jailed like we did in the 60’s and 70’s to suppress them. A bigger potential issue is if Al Qaeda becomes more involved in Egypt and with the MB. Al Qaeda may be more likely to after economic targets as they have no interest in an eventual solution but rather to create as much chaos as possible.
APA is currently very fairly priced if not for the events in Egypt, but I suspect there’ll be better opportunities down the road for those with the guts. One great investor said to buy when there’s “blood in the streets”. We already have that. It’s going to take a lot more than that to make this a great investment opportunity.
There’s a lot of ways to look at it. But, if one believes historically that big oil (CVX , XOM, etc.) typically trade at a P/E of 9-10 of next year earnings. One could easily make a case with the direction of many world markets that the price of crude of easily drop to $90/barrel or less. The earnings impact of that would be a significant downward slide for big oil stocks. I’m risk/reward investor and at current prices I’ve been on the side lines because I do see the potential downside heavily favors the potential upside.
Companies often do this #$%$ right after bad news. Always trying to throw bone to the shareholders to keep them sucked in. The money comes from somewhere. And it may or may not be good thing. Is increasing the debt or reducing the dividend to pay this a good thing? Or maybe they're trying to tell us they think the stock is undervalued.
As an outside observer looking to add WAG to my portfolio have a few observations to share.
Up until the first of the year WAG was bouncing along for quite a while between 30-35. From what I can see the big run-up to 50 was nothing more than riding the coat tails of the upward bounce with the Dow. Sure the not so good earnings report impacted the stock price, but I also believe the downward market trend did too. Believe the near-term trend in the Dow will be down and Wag will follow so for what it’s worth I’m taking a wait and see position with a tentative buy target price of $40/share. I would appreciate any RATIONAL feedback from any you that may have more insight in WAG.
Total Debt minus Cash comes to 26B in Total Debt. Currently paying 5.5% dividend but has a payout ratio of 108% means the dividend is unsustainable. Commodity prices and demand are falling and will likely fall further as China economy slows. The Brazilian economy is faltering and large street protests. A socialist president which will likely do even more of a money-grab from domestic companies like Vale makes for a very bad situation for Vale.
Even with a dividend cut Vale’s in world of hurt. And when they cut the dividend the stock will plunge. Single digits is in the future.