And so did all energy stocks, particulary ones with a high proportion of NG reserves. No conspiracy theories please.
Some have used the 8 : 1 ratio claiming that there has been a change from the old classic 6 : 1 ratio but that still gives us $30.80 bbl equivalent. Even $7 NG would be $56 bbl equivalent. The bottom line is that oil cannot compete with NG once the liquefaction process is perfected and done in mass for transportation. Coal cannot compete because it is dirty. It has Mercury and many other pollutants aside from carbon. Solar can compete but is limited by spacial requirements, ditto for wind. Nuclear can compete but NMBY will limit its use. Hydrogen is a real competitor but we are years away from a viable hydrogen market and infrastructure. Even then there are limits to hydrogen's uses and it is dangerous to work with.
The reason I sold most of my other energy stocks to buy UPL is because I see NG prices going up but I am not very confident about oil. Most of my other plays were a higher percentage of oil. UPL is no longer a pure play but it is still mostly a NG company, particularly its reserves. This used to be a bad thing. Going forward it is a good thing. In addition UPL is making lots of money now. Yes they will make more later but right now they have a low PE and big profits. In addition, lately I am starting to think they will be bought out sooner than later.
Please back up your trash with at least some attempt at a factual argument. Otherwise it is ignore for you.
I have almost no position in XCO. I sold before this downtrend got any steam. I am heavily invested in UPL but I sleep fine. NG's destiny is not in the $3 range. I would buy more if I had any money left.
Awhile is a subjective word. If you can make 50% or more on your money it is worth waiting for even 5 years. I doubt it will take 5 years to make 50% with UPL. We could make it in 6 months if this winter is cold.
Let's not forget that more NG trucks are on the road every year. Another important factor is the reduction in drilling rigs for NG. Eventually this consistent reduction of rigs along with more NG trucks and new or increased exports to Mexico, Asia and possibly Europe should lead to a 1,2 3 knockout punch leading NG prices significantly higher than today's prices.
But the trend matters more. Book value improving rapidly each quarter as the more important earnings, revenue and cash flow keep improving. Lot's of debt is a relative concept. The point is that the company is in a position to pay down debt if it wants to. The recipe is for making tons of money when NG pricing rebounds.
UPL is a buyout candidate but I would not buy it for that reason. Buyouts can be tomorrow, 10 years from now or never. UPL should be bought as a very compelling value play (IMHO). I hope they are not bought out in the near term.
I don't have much XCO so it I doesn't matter much to me but I do have a great deal of UPL. The down day in Wall Street is exasperating today's decline in UPL. I expect a nice bounce tomorrow if we don't get it later today. I am grateful that the weekly report was relatively good. If we came in at 100+ we would be in the 21 to 22 range today. The price of NG should start to edge up now. There is not enough time left to get back to "normal inventory levels" before next winter.
In all fairness the drop in NG pricing was the main causw for this drop. If NG was still at $4.45 to $4.75 UPL would probably be in the low $30 range presently.
I am now projecting that we will start next drawdown season 5 - 10 % below normal inventory. This may not be great news but it should stop NG from going down much from current levels and possibly up a bit before next winter. Then, well who knows, but they are projecting a cold winter. If it really is cold and we start with below normal inventory levels then $4.50 - $5.00 NG prices can return sooner than later. This would put UPL in the mid 30's within 6 months. I can't be the only investor who sees this. If our conference call is inspiring ( not easy to do) we could close today down only 1 - 3 %.