Note. I am hoping for energy to go down in the near term based on my current investments. Oil and Gas production is going up not down presently. There needs to be more pain to stop the total destruction of the industry. The Saudies have enough reserves to hold out for 6 - 10 months without causing an economic problem for themselves. It is in their best interests to continue to not support oil prices on many levels. In short, this bear market for energy is not over yet (IMHO).
The shorts are not covering at this time. I know, I tried to short yesterday but there were no shares available to short. The shorts are generally sharper than the longs for short term trading. I would not take a massive short position as a positive sign. My goal is now to get back in UPL as I can't ride it down but I hope to be ther to ride it up probably sometime over the summer. When those earning reports come in with no oil hedges it will be ugly. The stock will recover and prosper but not anytime soon (IMHO). If you can handle the rollar coaster ride then I would hold my position if I had one but be realistic as to when the stock will rise. One possible exception would be a super cold February and March. Then you could see UPL recover more quickly. It can happen but it is a long shot. Again, long term I don't think you can go wrong with UPL.
I tried to short this stock yesterday but was told that fidelity had no shares to short. Too bad. I would have made some money. I will have to wait and buy the long position after it hits bottom. Don't get me wtrong, this stock will be a winner, just not yet, in my opinion.
With NG and oil this low I see no reason for UPL go go up much further and several reasons it may retreat. I am watching too closely to buy, hold and look again next year. UPL is a great value here but if February is warm we can see UPL below $11. I am not willing to take that chance presently. On the other hand with a cold February we can see UPL at $16 and either way UPL will eventually go up. Some of my present plays are more money in the bank types as I lost most of my XCO profits when I recently sold most of my position and I am still recovering from that hit.
What I find amazing is that NG was down today in spite of a excellent weekly withdrawal this week and another expected next week. I have no explanation except that perhaps the current NG prices already took into account these expected withdrawals and th eeffect was minimal. I suppose we would need a super cold balance of winter to really move NG prices. We will see.
NG is moving up and that can't hurt. I know the brokergage frims don't like EXo but EXC hedged and NG is going up so just maybe they are wrong here..
One should not underestimate Cramer. He is usually correct even ift becomes a self fulfilling prophecy from his minions. However he is wrong enough so that one should realized his word is not gospel. This oil thing is about geopolitical issues more than supply and demand. Let's be real. Oil fundamentals did not permanently change 100% in just three months. But UPL is more NG than oil. UPL makes money on NG at low selling prices. They will eventually do well after the justified bashing from their paultry hedging program is over. If UPL goes under $10 I don't think I could not resist buying in even with the lousy hedging and high debt situation. Probably UPL won't go there but I will be watching..
Sure it is XOM manipulating NG prices. Not organizations like the one you belong to that are manipulating prices. I am getting very close to buying in.
I have been out of UPL for a while. I used to think the management of UPL was tops. They became a super low cost NG producer and they can make money on NG even in the current environment. I don't even fault them for what now turned out to be a bad oil investment. However having no oil hedges in place for 2015 and hedging too late to get good pricing on NG was very poor management. Nonetheless I think they will also do well though apparently not yet. Of the 2 I like XCO better. Even without a CEO at least they were smart enough to have a good hedging program in place. Believe me I was very disappointed to have to sell. Maybe I can buy back in later in the year if XCO slides further down and my other investment go up but it rarely works that way.
It is important to understand that the stock price is all that counts. XCO has taken a beating and it continues to be panned by many "advisory firms". I set a limit as to how much principal I am willing to lose. It broke through that limit today. As a result I significantly lowered my position as I am never willing to risk too much loss on any stock. I still believe in XCO and still have a reduced position but this is how I play the market. Now that I sold a good portion the stock can finally recouperate.
The stock price does not determine if it survives. In theory there is a connection with the stock price and the expected future operations. In practice, this relationship can be manipulated. More in smaller cap stocks but it applies universally. In the case of XCO it is difficult to gauge how much is manipulation and how much is legitimate concern about future operations though one can argue that there is some of both involved. There are no definative correct answers here. If XCO survives or gets purchased, which in my opinion is probable, the longs will make a multiple on their money. We will see.
HOUSTON (AP) -- Cheniere Energy landed a 20-year contract to supply natural gas in Portugal, sending shares up 8 percent in early trading.
The natural gas boom in the U.S. has led to a rush by major producers to put into place the infrastructure to ship overseas.
Companies such as Exxon Mobil and Sempra Energy are seeking federal permits for more than 20 export projects that could handle as much as 29 billion cubic feet of natural gas a day.
Actually the low Canadian dollar is beneficial for Canadian energy products when paid for with stronger US dollars.
Of course they are better, in the sense that they are much more stable and can be considered money in the bank. However UPL has the potential to triple from these levels which is not going to happen in a more stable stock. One can argue both sides of this story. It depends on your risk tolerance and overall investment portfolio. Most of my money is now in what I believe to be stable stocks but I leave room for some daring. Unfortunately UPL has no 2015 oil hedges. They are paying dearly for this and it may not yet be over.
I concur that this stock is under accumulation. It is a trend in the industry. The end of super low energy prices is coming soon, though I wish I knew how soon.
We all know that this cannot continue for more than a few months and that the current hedges should protect SD. The question becomes how quickly can oil recover and how high it will go. But SD has mostly NG assets. Therefore I would not sell SD at this time though I concede that there are better picks out there if you want more of a sure thing.