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Bp A Screaming Buy

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P/E of 5, yield of 10% (although likely to be cut for a year or so).

Totally overdone fall in price.

http://www.thisismoney.co.uk/markets/article.html?in_article_id=506125&in_page_id=3&ct=5&expand=true

disagree. The price has to fall a lot more before I would even think about buying BP. I have a buy price set for £5000 worth of shares at 330p.

The reason is that BP is now a speculative, punt type share rather than the old faithful dvidend payer it was prior to the disaster.

That and the sheeple all think the bottom is in and are piling back in as illustrated above which makes me think there is more pain to come yet.

I'm happy to miss out if I can't get shares at my buy price.

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The British public are now battle hardened to this sort of thing. So another blue chip company experiences a massive dip in their share price, well it's par for the course right now.

The only difference is that BP is due to a technical failure rather than being a Northern Wreck style basket case of a company, they may have longer term structural financial issues (I don't know), but their overall financal position hasn't caused the dip.

It could just be another M&S.

Edited by Chef

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http://www.zerohedge.com/article/mexico-environment-ministry-says-pemex-and-mexican-ministries-sue-bp

http://www.zerohedge.com/article/bps-dividend-cut-done-deal-here-bps-scary-debt-maturity-schedule

wouldn't touch them until the extent of their liability is known.BP have effectively written a blank cheque to O'Bama.

more worryingly,know a few people who are buying and ..how can I put it..........their Marconi shares are still worth f*** all.

A lot of people are thinking in this way.. that the downside risk is unlimited.

It is not in the interest of the US to actually drive them to bankruptcy as they would then have to organise / pay for the oil spill themselves.

I was willing to bet a small wager last Thursday that we have hit peak fear. I wouldn't bet more than I'm prepared to lose, but I am definitely in the camp that think they are over sold.

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A lot of people are thinking in this way.. that the downside risk is unlimited.

It is not in the interest of the US to actually drive them to bankruptcy as they would then have to organise / pay for the oil spill themselves.

I was willing to bet a small wager last Thursday that we have hit peak fear. I wouldn't bet more than I'm prepared to lose, but I am definitely in the camp that think they are over sold.

I agree about last Thursday. Sentiment was awful. The main headline across all the press.

Obama is going to have to calm down his socialist thinking with the company as US owned as it is UK owned. It is not in their interest to see BP fail whatever the dumb rhetoric.

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It is not in the interest of the US to actually drive them to bankruptcy as they would then have to organise / pay for the oil spill themselves.

Not sure i'd want to bet on US rationality

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Obama has to make a lot of noise due to his political situation (November elections).

In 5 years will all this have blown over? Most probably.

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Not sure i'd want to bet on US rationality

To look at it another way then, if BP go bust, Obama will lose his patsy and attention might turn to who gave them permission to drill and why they weren't inspected/regulated more closely ;)

Edited by libspero

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You need to go and read the doom threads over in the off-topic forum - apparently the BP leak has now created a singularity whose event horizon is slowly expanding and will envelop the Gulf before the end of the Summer. :blink:

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Why the hell would I want to invest in a shit company with a shit safety record and shit management who lose control because of shit subcontracting? http://online.wsj.com/article/SB10001424052748703871904575216620922595624.html

Doesn't sound like the right hand knows what the left hand is doing.

Love this comment under the aforementioned article: "BP's problem is organizational. Most capable drilling & operating personnel got fed up with them under the Browne regime and left for other places. "

Edited by gruffydd

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The sheeple buying now honestly believe that when the dividend is restated they are going to get a 9% yield on their BP shares they bought in the 300s for eternity.

If only life were so simple.

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I agree about last Thursday. Sentiment was awful. The main headline across all the press.

Obama is going to have to calm down his socialist thinking with the company as US owned as it is UK owned. It is not in their interest to see BP fail whatever the dumb rhetoric.

central planners think they can control everything.That's obama's problem.

they also have the audacity to demean people that do not agree with them as "mentally deficient",or some equally insulting tirade.

nature has a habit of throwing spanners into the works of even the most meticulously crafted schemes.

....and central planners certainly don't have the flexibility,or innovative capacity to deal with it.

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The sheeple buying now honestly believe that when the dividend is restated they are going to get a 9% yield on their BP shares they bought in the 300s for eternity.

If only life were so simple.

I love the uber bears on here.

If it isn't a worthless paper currency or wallpaper bond then it can't possible have any value :lol:

People who see financial risk in the black and white view of 'fixed income bonds and cash are good and safe'; 'equities, commodities and property of any sort are bad and unsafe'.

Unfortuntely the world isn't so simple. Bonds and cash are mere promises to pay. People unfortuntely can break those promises.

Value is in real assets - companies and commodities.

You buy when something is being priced at less than its usual worth.

Likewise risk is reduced as the price drops. It is amazing how people think an asset is of greater value and less risk the higher its price! (i.e. bonds currently!).

Read some James Montier - Value increases as something sells for less than its usual price.

Currently BP is on a price to book of 1.1, i.e. its broken up assets in a sale are worth the same as its share price. on a P/E of 5 your investment is paid for in 5 years. This is regardless of any dividend paid.

If BP pay a dividend of only 5% over the next 5 years, that is another 27% return. If they pay no dividend you still make a 100% return over the 5 years. Its cheap. Seriously cheap.

Typical case - huge US payout, no dividend over say next 5 years and oil doesn't rise - possible ROCE (Return on Capital in 6-7 years or so).

Worst case - Company go bust - return of capital as book value equal to share price.

Good case - Low payout, dividend halved, oil rises - possible return on capital employed within 4 years or so.

Show me an asset with better potential than this? Certainly not cash or bonds where inflation is 5% and they are returning 2-3%!!! I love paying the government to destroy my savings. not.

Of course BP like any other company or other asset for that matter (i.e. worthless bonds and paper currencies) can fall in value. However as Montier, Buffett, Graham all say - the risk is substancially reduced when the price you pay is much lower than usual.

The fact that BP has some real value in the ground and it is trading at an exceptionally low price in relation to that value presents a decent bet that a return can be made on its shares.

Like anything you buy (stocks, bonds, cash, property), it could fall to zero worth. The odds however are that things will work out better than this and that the price is not reflecting the likely outcome. All investing is a bet on an outcome. try and make those bets when the odds are greatly in your favour, as I feel BP may be now.

Value increases as the price drops and risk reduces as the price drops. Try and understand that ubers before you next buy that 10 year bond at 4% fixed ;)

Edited by ringledman

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The sheeple buying now honestly believe that when the dividend is restated they are going to get a 9% yield on their BP shares they bought in the 300s for eternity.

If only life were so simple.

I thought the market swings between greed and fear: you sell to the greedy and buy from the fearful. The "sheep" are surely the majority, i.e. the greedy and fearful themselves.

It's extraordinary how on this board, almost every poster feels BP is a "must buy" or a "don't touch".

As nohpc himself says - if only it were so simple

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P/E of 5, yield of 10% (although likely to be cut for a year or so).

Totally overdone fall in price.

Technically speaking, this ain't over. There could be a swift retrace to 40 or so but you are playing with fire. Volume speaks and it is telling me that there will be another test of those "overdone" lows.

BTW, it is amusing that people will look at an apparently low P/E ratio and assume that the P must be wrong, not their estimate of E.

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http://www.zerohedge.com/article/mexico-environment-ministry-says-pemex-and-mexican-ministries-sue-bp

http://www.zerohedge.com/article/bps-dividend-cut-done-deal-here-bps-scary-debt-maturity-schedule

wouldn't touch them until the extent of their liability is known.BP have effectively written a blank cheque to O'Bama.

more worryingly,know a few people who are buying and ..how can I put it..........their Marconi shares are still worth f*** all.

Yeah the undetermined liability (is it capped?) makes it difficult to judge net assets. Also if strategic assets get seized by say the state / shut down gulf drilling it's not great for future cash flows.

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Yeah the undetermined liability (is it capped?) makes it difficult to judge net assets. Also if strategic assets get seized by say the state / shut down gulf drilling it's not great for future cash flows.

surely the US Jones Act, which means that all vessels in the Gulf must be crewed and operated by US personel, surely, the BP part in this is limited...they cant be forced to pay when the LAW says a third party must operate....the LAW is at fault..the US firm MUST be ultimately liable.

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surely the US Jones Act, which means that all vessels in the Gulf must be crewed and operated by US personel, surely, the BP part in this is limited...they cant be forced to pay when the LAW says a third party must operate....the LAW is at fault..the US firm MUST be ultimately liable.

No idea . Complex legal . Not even sure how BP report? IFRS in UK ?

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No idea . Complex legal . Not even sure how BP report? IFRS in UK ?

nor me.

but that might be why Obama is screaming so loudly...he might lose a case in court and Haliburton turns out to be the culprit.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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