'Weird cheap'? But it is not dirt cheap yet.
Not yet nope, maybe it will become dirt cheap. "weird cheap" for me is an odd feeling I get about a stock I'm thinking about buying. 90% +/- of the time when I didn't buy at that time I regretted it later, with the window of opportunity passing.
Like Scomac said it is cheap for a reason. The triple water fall hasn't happened yet for both oil price and O&G stocks and related stocks.
I have no idea what a "triple water fall" is as I don't engage in technical analysis.
Yes it looks like his company could sell oil at $50 and break even prior to interest costs on their debt, $56 after interest. What's also interesting is that their rapid growth has been largely financed by taking on a lot of debt. In Q3 their cap ex was 2x what their profits plus DPN was, with the excess being financed by taking on about 1.5 bil in additional debt during that quarter.
I doubt that debtors will be rushing out to throw money at these companies at this time, and therefore these companies will have nowhere near the same amount of capital available to keep drilling and growing as aggressively as in the past. They can recycle their internally generated cash flow, but tapping debt markets for more capital isn't likely. In this company alone we could see their cap ex go from 3.2 bil in Q3, half of which was financed by new debt, to 1.6 bil a couple quarters down the road, because they can't borrow the 1.6 bil in debt they borrowed to be able to spend 3.2 bil in Q3.
One MSM reported investors, by and large, are not buying yet despite the big drops for O&G shares.
Well a lot of Canadian oil producers rallied today so someone had to be buying them.
So stay calm, don't buy till much bigger drops is my belief.
Yep, good luck with trying to time that perfect bottom. It's sweet when it's possible. Let us know when you see the triple water fall and decide to buy in and what you buy!
Research until your head hurts then scream Banzai!!! and charge fearlessly to victory or death!