I like Oil

[aja8888]

You folks that are gambling...why not jump on some ETE @$4.10/share? Pays a 27% dividend. CFO quit so it may be an opportunity for a pop.

Energy Transfer Equity LP(NYSE:ETE)’s stock dropped 30.81% to $4.84 after announcing the replacement of its chief financial officer. Energy Transfer’s Chief Financial Officer Jamie Welch will be replaced by Thomas Long, chief financial of publicly traded affiliate Energy Transfer Partners LP, according to a filing on Feb. 5, 2016, with the U.S. Securities and Exchange Commission. The change “was not based on any disagreement with respect to any accounting or financial matter involving the Partnership or any of its affiliates,” according to a statement on Feb. 8, 2016.

 

[OrcasIslandBound]

Are you all talking about penny stocks?

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[Running_Man]

Well I was talking about the second largest natural gas supplier in the United States that is probably going to go belly up if oil doesn't reverse to 50 soon. The impact of the oil price drop was supposed to be this great tax cut for the economy and instead we have 5 year treasury yields dropping from 1.75 to 1.15 in two weeks and international rates going below zero. The deflationary environment and what it is doing to companies that have overexposed themselves to debt is now filtering through the economy.

 

[ESRwannabe]

SDLP is trading at a P/E of .97 now.

AMLP hit a new low of 8.43 today (n/m I'm wrong, 52-week low is 8.25).
P/E of 4.13. P/B is 1.03 , and P/CF is 5.06 as of 1-31-16.

 

[Coolius]

SDLP is trading at a P/E of .97 now.

AMLP hit a new low of 8.43 today (n/m I'm wrong, 52-week low is 8.25).
P/E of 4.13. P/B is 1.03 , and P/CF is 5.06 as of 1-31-16.

What's your take on the future prospects of SDLP, ESRWannabee? Think they'll survive?

My son, despite my advice not to venture into this sector, is heavily into SDLP, bought when there was still a dividend. He is holding for a turnaround play. I am not optimistic.

 

[ESRwannabe]

What's your take on the future prospects of SDLP, ESRWannabee? Think they'll survive?

My son, despite my advice not to venture into this sector, is heavily into SDLP, bought when there was still a dividend. He is holding for a turnaround play. I am not optimistic.

I haven't looked into in a while and I don't own any shares of SDLP. However when I looked at them a few months ago they had contracts with the major oil companies that really didn't start to expire until 2017 and even then that was only one or two contracts. If I remember right most of their contracts were good until 2020.

I think it basically comes down to whether or not oil recovers before their contracts are up. My guess is that oil will be higher by the end of the year. Maybe like $40 to $50. I'm not sure if that would be high enough for SDLP though.

Supposedly SA and Turkey are on the verge of launching a ground invasion of Syria. The pretense is to fight ISIS but the real goal would be to overthrow Assad, which Russia and Iran have parts of their military in Syria bombing the rebels. Seems to me like we could end up having a big war going on soon. Unfortunately Turkey is in NATO so who knows what kind of chaos could be unleashed.

Not to turn this political but I don't understand why we support Turkey and SA. The US gov has no morals. If you compare the laws/rules in SA with ISIS there is really no difference. Then with Turkey they look like another crazy dictatorship. It would make more sense to me that the US support its own energy industry and finally get free of the middle east.

Long story short is oil could spike like crazy. The market is not taking into account all the wars going on in the middle east that could easily get worse.

 

[harley]

Just bought another batch of SDLR. This is in my active trading/play account, so it wouldn't be significant to you bigger traders. But I put in a sell order for it at $3.50 in case of a spike. I'm not much of a trader. A short term hold for me is less than 3 years. But it's so cheap to play in the oil arena these days it's a good place to practice a little buy and sell. Maybe I'll even buy low and sell high. Exciting stuff!

 

[Car-Guy]

You folks that are gambling...why not jump on some ETE @$4.10/share? Pays a 27% dividend. CFO quit so it may be an opportunity for a pop.

The past six weeks in oil (and many other sectors too) have presented some great opportunities for swing traders.

 

[aaronc879]

What's your take on the future prospects of SDLP, ESRWannabee? Think they'll survive?

My son, despite my advice not to venture into this sector, is heavily into SDLP, bought when there was still a dividend. He is holding for a turnaround play. I am not optimistic.

They still pay a dividend, it's just smaller. They just paid out at .25$/share last week down from .5675$/share. That's still a large dividend.

 

[Running_Man]

Well with Seadrill needing 2.5 billion by the end of 2017 and already stating they will raise 1 billion in equity in 2016 (which would cut present owners share of the company in 1/2) they would need to dilute present shareholders to about 1/6th of the equity of the company merely to be able to pay debt coming due and in the meantime contract values are plummeting and they have construction contracts for 4.3 billion in new rigs coming that were ordered when contract values for a rig were almost triple what they can get now. Add another 11 billion of debt they already have and even at zero percent interest they can't get anyone to finance them.

Maybe this is the home run speculation of a lifetime that can happen with a sudden reversal of oil prices. But in general this is a company that horribly misread it's market and is more likely than not to be on the way to bankruptcy and giving the assets to the bondholders and a new future company....

 

[petershk]

I still believe that there's a really nasty blend of debt chasing debt fueling a game of chicken... both at the country and company level. Thus I like to bet on the companies that can hold out the longest (I.e. least debt... best cost control). I believe oil price won't stabilize until capacity is lower than demand and that will require some very nasty and bloody bankruptcies, dividend cuts, debt defaults, etc which I think is going to happen in the next year or two.

The winners will be able to pick up the losers very cheaply.

H

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[papadad111]

Great comments. I agree. This is a fools game for the long term but great swing trading.

I don't think sea drill or Chesapeake survive. It's just a matter of time. we will see bear market rallies but not sustainable, and not enough for these companies to survive.

That said. Some smart traders will load up just at the right time and get really rich ... Really quick... On an upswing trade. They're gonna nail it. It will be one of those once in a lifetime trades ...

PS.

Did anyone catch the power lunch bit a few days ago with the CEO of NAT. Nordic American tankers. Super interesting ....

 

[Mulligan]

Great comments. I agree. This is a fools game for the long term but great swing trading.

I don't think sea drill or Chesapeake survive. It's just a matter of time. we will see bear market rallies but not sustainable, and not enough for these companies to survive.

That said. Some smart traders will load up just at the right time and get really rich ... Really quick... On an upswing trade. They're gonna nail it. It will be one of those once in a lifetime trades ...

PS.

Did anyone catch the power lunch bit a few days ago with the CEO of NAT. Nordic American tankers. Super interesting ....

Yes I saw it and watched the trading explode on it when CEO was on show. It may be a very good buy, but the market isnt retarded. The ol'
Codger made it sound like he could "make it rain" money. From what I understand they compete heavily in the spot oil shipping market. And we know what happens with the dry bulk spot market when over capacity occurs. He didn't come out clean to say his ships weren't rust buckets and didn't really want to talk about vessels being used as storage devices. But they are making money and not drowning in debt either. I was tempted I admit...


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[ESRwannabe]

Well this is aggravating. AMLP is not passing on the dividend increases for a second time. They kept it steady at .299 again.

http://www.alpsfunds.com/distributions/AMLP

 

[Mulligan]

Well this is aggravating. AMLP is not passing on the dividend increases for a second time. They kept it steady at .299 again.

http://www.alpsfunds.com/distributions/AMLP

A MLP expert was on CNBC yesterday and was suggesting many companies would have to cut dividends. Basically citing the same experiences that KMI faced. Not being able to pass on earnings as dividends and financing out all cap ex spending. Not having the capital to finance build out, which will slow growth. He was saying near term prospects were not good.
Im rooting for you on the sidelines, ESR, as I know you have mentioned you have a lot riding on this industry!


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[ESRwannabe]

A MLP expert was on CNBC yesterday and was suggesting many companies would have to cut dividends. Basically citing the same experiences that KMI faced. Not being able to pass on earnings as dividends and financing out all cap ex spending. Not having the capital to finance build out, which will slow growth. He was saying near term prospects were not good.
Im rooting for you on the sidelines, ESR, as I know you have mentioned you have a lot riding on this industry!


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Yeah I think there will be some cuts but overall I think AMLP will still grow. Otherwise all these companies (about half) that just raised distributions are being incredibly reckless.

Anyway, if the dividend stays as is the next few years and then starts to grow again, then I win big time.

If the dividend were dropped in half I would still come out about even with other options I had for income when I invested the majority of the money into AMLP.

 

[Brat]

You folks that are gambling...why not jump on some ETE @$4.10/share? Pays a 27% dividend. CFO quit so it may be an opportunity for a pop.

My DD told me that the departure of a CFO unless by death, timely retirement or professional promotion is the most accurate predictor of a corporation's demise. Think Enron.

 

[Fermion]

SDLP is not SDRL

They are certainly inbred, but not the same entity.

In some form, SDLP could survive even if SDRL goes belly up.

SDLP does still pay a dividend, a measly 50% though.

 

[Running_Man]

SDLP is not SDRL

They are certainly inbred, but not the same entity.

In some form, SDLP could survive even if SDRL goes belly up.

SDLP does still pay a dividend, a measly 50% though.

You would have to explain how that is possible when all of the Seadrill companies have cross default agreements. Whatever is in the best interest of John Fredriksen will be the course ultimately taken, perhaps he would keep SDLP going and let SDRL fold but I am not smart enough to figure out all of the contracts and default agreements he has set up between SDRL SDLP SFL and NADL Usually a billionaire setting up a myriad of intertwined companies has a senior debt position that saves his hide at the expense of other investors but really I can't figure it out at this point

 

[Mulligan]

You would have to explain how that is possible when all of the Seadrill companies have cross default agreements. Whatever is in the best interest of John Fredriksen will be the course ultimately taken, perhaps he would keep SDLP going and let SDRL fold but I am not smart enough to figure out all of the contracts and default agreements he has set up between SDRL SDLP SFL and NADL Usually a billionaire setting up a myriad of intertwined companies has a senior debt position that saves his hide at the expense of other investors but really I can't figure it out at this point

You mean the big boys don't look after us small fish? What you wrote is exactly why I don't dumpster dive. First, I wouldn't be any good at it ( I would be a bit too quick to buy and panic sell on a head fake lower) and second I know I would be the first one bent over the barrel.



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[Fermion]

I don't know all of it either but I am not sure SDLP has guaranteed anything related to NADL. JF will probably come out ok like he always does.

 

[Mulligan]

No wonder I keep my investments simple... Oil down today, so I thought about having a little fun. Instead of playing with companies just bet on the price of oil, with an oil fund. Well that wont work either. Certain ones involve K-1 forms, give me a break, I am not dealing with that for a small bet... Ok, now I found ETN's... Im thinking ok, these have traditional cap gains and losses, though there is risk in underlying issuing company going bankrupt. So, I can accept that risk except now I read these notes aren't truly tracking oil, and the underlying value of the oil is considerably less than the inflated trade price. Meaning, I assume too many people are thinking like me. Well so much for this idea.....


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[Car-Guy]

Oil down today, so I thought about having a little fun. Instead of playing with companies just bet on the price of oil, with an oil fund.
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You may be right. Today is looking like it could be a day to bet on black (oil) and hope it doesn't keep hitting red (losses) too long. YMMV, a lot.....

 

[Mulligan]

You may be right. Today is looking like it could be a day to bet on black (oil) and hope it doesn't keep hitting red (losses) too long. YMMV, a lot.....

I was thinking that, but no way am I betting on a "stock" that the underlying asset isn't even related to the price you are buying at. And messing with a K-1 over a 10k bet isnt worth it to me.


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[hesperus]

I was thinking that, but no way am I betting on a "stock" that the underlying asset isn't even related to the price you are buying at. And messing with a K-1 over a 10k bet isnt worth it to me.


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That's good sense. If you are uncomfortable with the risks of commodities, you should stay away. Always stay within one's limits.