WRES is riding on its lower BB, so I would sell the next bounce, could go as high as $1.40. I would never hold beyond a 10 percent loss.. respect the market, now you see why.
The Marcellus shale region is all natural gas fracking from marine sedimentary rock. WRES's latest 10Q indicates that most of their revenues are from oil, but I didn't see an exact breakdown given. As for what WRES is worth, that would be the lesser of $3.50 or what someone is willing to pay for the stock.. I admit debt is not a crippler to value for WRES compared to other frackers, coming in at 60 percent of land and equipment. So basically none of these fundamentals account for the bear raid on this stock which is why trading should be based on technicals. I wouldn't buy this stock as long as its downtrend is intact. Every rally is a sell until not..
Commodities began crashing because demand fell off a cliff, starting with China the Europe. Hedge funds speculating in oil got the price up to absurd levels, this bubble caused the US Fracking industry to take off since they could now produce at a profit. Next, money was needed, so Wall Street turned the Fed's printing press into junk bonds for the industry, so now we had a highly leveraged bubble in oil properties backed by the price of oil. The weakness in demand then pricked the bubble. The unwinding of the hedge trade created strong demand for US Dollars, hence the rise in the USD. The USD rising causes the price of commodities in USDs to decline. Now all that's left is the blowup and default phase. Hedge funds will blow up and Frackers will default. This will cause reverberations that will affect the other highly leveraged asset bubbles.. Circa 2008 x2 will then erupt.
Citi affirmed its Sell rating and $0.75 price target on FXCM Inc (NYSE: FXCM) Friday.
Analyst William R. Katz saw a 75 percent downside to the stock and felt that its shares were being boosted by retail day-traders who may be looking at short-term technicals rather than the “significantly impaired equity value” of the company.
Katz believed “the residual value to shareholders is worth no greater than $0.60 to $0.85 per share” and thought that the market capitalization of the company, including the proceeds from Leucadia, should not exceed $1.2 billion.
Related Link: Former GFT Manager Of Global Risk Says Charles Schwab-FXCM Buyout Rumor 'Absolutely Makes Sense'
Put another way, Katz believed 95 percent of proceeds from a $1.33 billion sale would go to Leucadia and debt holders with 5 percent left over for FXCM shareholders.
“We believe the shares are trading at unsustainable levels and we expect the price to migrate toward our target price as investors work through the implications of the Leucadia financing,” Katz concluded.
With the USDollar no longer a Petrodollar, the turn will be abrupt and will take no prisoners! Nobody is telling you what the real story is, once you know it will be too late..
You're right, sentiment could change and so could exposure of fundamentals.. just like what happened to FXCM,, HoHoHo! You don't know who got caught in this junk-debt fiasco YET! But S&P's new junk rating on WRES was maybe a HINT?
The general meaning of our credit rating opinions is summarized below.
‘AAA’—Extremely strong capacity to meet financial commitments. Highest Rating.
‘AA’—Very strong capacity to meet financial commitments.
‘A’—Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.
‘BBB’—Adequate capacity to meet financial commitments, but more subject to adverse economic conditions.
‘BBB-‘—Considered lowest investment grade by market participants.
‘BB+’—Considered highest speculative grade by market participants.
‘BB’—Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.
‘B’—More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.
‘CCC’—Currently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments.
‘CC’—Currently highly vulnerable.
‘C’—Currently highly vulnerable obligations and other defined circumstances.
‘D’—Payment default on financial commitments.