Posted:
#1
Does anyone think everyone will cooperate with the OPEC deal? Anyone buying oil stocks right now?
WallStreetCap, what's your take on this?
Energy Stocks
...
Views: 1255
Posts: 15
Posted:
#2
I dont know about generic oil stocks because some of them really didnt drop all that much.
I have some cheap shares of a few stocks I thought were a decent risk/reward and they are doing ok the last few days.
If you do some analysis and have some names let me know and I can give my opinion.
On the oil stocks I would only consider the harder hit ones like BP or COP or RDS.A, not the larger ones like XOM or CVX as they are well diversified and didnt drop all that much comparatively.
Posted:
#3
I rarely invest in individual stocks. I was thinking more of Vanguard Energy Investor Fund VGENX. I'm taking my money and running with the gains that I made with that junk bond fund (VWEHX) I was speaking of several months back.
I just don't know if it's too late. In your opinion, are you taking this OPEC deal seriously?
BTW, the Top Holdings within that Fund are XOM, CVX, RDS.A,, SLB and EOG.
Let me know what you think whether it's too late or not. Just looking for your opinion b/c you seem to know your sh!t. 
Posted:
#4
If I may interject,....... now is a bad time to try and get into the energy space. You are late and the move has already been made and OPEC has made their "point". There is no problem waiting for a better entry point. Don't forget this..
FWIW, Energy makes up 30% of my portfolio before all of this. I am a long term believer in this space, but the recent moves of the last week are all based on countries holding firm to the agreement.
For example, no one know if Russia or Iran will agree to the production cuts. Personally, I think the deal is a farce, and don't believe these countries will stick , because they are in a world of hurt. As a result , they really need to keep pumping, and think they are playing the 'Saudis.
The Saudis (who the pull the strings behind OPEC), have the wherewithal to survive some down years.
Long story short, ... I don't believe the Iranians and/or Russians.. Besides, even if they hold to the agreement, American producers have the ability to pick-up the slack that OPEC is hoping to cut from world market productions.
So, I am looking to trim some of my positions soon if the market believes that $55 is a fair price for a barrel of crude. This is at the upper extreme of my price expectations FWIW.
Posted:
#5
I agree with you about the agreement I dont think these countries will hold to it once they start seeing decreasing revenues. I would add Iraq to the top of the list..the last thing they want is to slow production.
For me at my age I am not looking for safe stable 3-5% dividend stocks which is kind of what stocks like XOM are, I want to take more risk for more upside and that is how I approach investing in situations like this.
Posted:
#6
Quote Originally Posted by Rush51:
exactly. The time to buy was last January and February. I personally bought Devon and Helmerich & Payne which are both up over 120% and 75% respectively.you are too late
If I may interject,....... now is a bad time to try and get into the energy space. You are late and the move has already been made and OPEC has made their "point". There is no problem waiting for a better entry point. Don't forget this..
FWIW, Energy makes up 30% of my portfolio before all of this. I am a long term believer in this space, but the recent moves of the last week are all based on countries holding firm to the agreement.
For example, no one know if Russia or Iran will agree to the production cuts. Personally, I think the deal is a farce, and don't believe these countries will stick , because they are in a world of hurt. As a result , they really need to keep pumping, and think they are playing the 'Saudis.
The Saudis (who the pull the strings behind OPEC), have the wherewithal to survive some down years.
Long story short, ... I don't believe the Iranians and/or Russians.. Besides, even if they hold to the agreement, American producers have the ability to pick-up the slack that OPEC is hoping to cut from world market productions.
So, I am looking to trim some of my positions soon if the market believes that $55 is a fair price for a barrel of crude. This is at the upper extreme of my price expectations FWIW.
Posted:
#9
Wall, I believe we may be around the same age (mid 40's ? ) , dividends are a crucial part to the returns of the S&P 500. Don't discount the success of these dividend payers. They are viewed by many as stogy enterprises, but they play an important part role in the "growth" of one's portfolio, too..
Posted:
#10
Quote Originally Posted by Rush51:
Wall, I believe we may be around the same age (mid 40's ? ) , dividends are a crucial part to the returns of the S&P 500. Don't discount the success of these dividend payers. They are viewed by many as stogy enterprises, but they play an important part role in the "growth" of one's portfolio, too..
Well to me that is a multi-prong issue..
These dividends and increases and float shrink is all financial engineering and not based on the health of the business.
When corps take on debt to increase dividends and shrink the float they are appeasing investors and not making good decisions for the company itself. They are engorging themselves and their bonuses artificially, to me if you have to borrow even when the IRR tells you to in order to pay a dividend it is a mistake. If you cannot fund dividends and buybacks from cashflow then you are robbing the future to pay the present...big big big mistake.
The divi ratio on the SPX is not accurate because we are not distinguishing which companies are actually adding to their liabilities and thus reducing shareholder equity in the process.
Also I was speaking as to my purpose for investing in stocks, that my focus is not based on divi yield at our age...and yeah we are similar ages. I do not look blindly at a divi yield and buy based on that alone..it is a consideration but if I really want to own the stock I will dig deeper and see if I like their business trends, their leverage, their future, their current stock price vs what I think it could sell at...stuff like that.
This last year I actually DID buy some divi stocks that I thought had the divi play AND upside based on current stock price..in the energy field. In the past some of my highest return stocks were also based on divi yield, but in EVERY case the company was paying the dividend with cash flow...not adding cheap debt which debt will need to be repaid and if yields do go up that cost of refinance goes up and is an added liability to corps. I dont think people are pricing that fact in...sure debt is cheap now but most of these players are short terming it for max low rate..look at the balance sheets and see that MANY MANY companies are converting and adding long term debt to short term to save on interest costs...another stupid stupid decision and very short sided.
There is a TON of research and analysis required to buy a stock and most people do not have the interest to do it.
Posted:
#11
Hey Wall, very well said.. And I agree with much of what you have to say, particularly about companies that are robbing the future to pay the present...It is a big mistake as you mention, and companies are not "investing" for long term success when they make these short-sighted decisions .
Posted:
#12
Doesn't anyone have any interest in Energy stocks ?
Since the beginning of the year, OPEC has extended its production cuts, and it still hasn't been enough to keep from the slide in oil. The world is awash in oil, and due to U.S. pumping close to 10M barrels a days, a record in recent decades.
Oil stocks are down about 20% this year, while the S&P is up about 8.5%. Now is the time, folks, to start doing some buying in the energy complex. 
The downside risk is more minimal than the upside potential, IMO... 
Posted:
#13
Rush,
I guess it depends on what energy stocks we are discussing. I had not looked at the oil majors in a while and most all of their prices are quite above the 2016 lows...some like 20-30 percent. I think the little players that are leveraged are hurting badly but the bigger heavier players are not as much.
What names are you considering?
Posted:
#14
I'm thinking big, like the major oil integrators (BP, Chevron). As you pointed out, Wall, the little players are highly leveraged , and need the capital infusion from Wallstreet to keep on pumpin'. I can't see this going on endlessly as the wildcatters continue to lose money on every barrel they pump.
In addition OPEC is planning to tighten the screws (IMO) on its member states, Libya & Nigeria. They were not part of the production cuts ;
https://www.reuters.com/article/us-opec-oil-idUSKBN19L20X
In summary, I think the current price of oil is not sustainable long-term, and represents a good buying opportunity. I plan to add to my positions this week.
Hot Forum Topics
