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I think Tesla’s a joke.
The mainstream car companies are now starting to go big on electric cars. It won’t be long before Tesla are history. In my view, their cars are horrible things, compared to mainstream. E.g. Mercedes EQC and EQA.
Then explain TESLA then. does it make 50 billion profit? it is valued at 500 billion or something.
I should have added to my previous post that we should expect a lot of shares price volatility in April and May as creditors seek to sell their 3 billion of shares. How many of these shares are placed with institutional investors off market as opposed to being sold via MMs is anyone’s guess.
Great opportunity for traders but for long term holder best to batten down the hatches and wait for September FTSE entry.
Can’t argue with that
Or you could do a Sturg and argue that black is white, and respond with “No comment” to anything which might damage you.
Steve, I believe your analysis to be fair and reasonable. Cant argue with that. Thanks for sharing. Owls, please note
My value calculations are pretty similar with Soders and I have a price of 40p by Q3 which will put Harbour into FTSE100 with a valuation of £7.5b, generating a dividend of 2p per share. My key assumption which underlies the above is a medium term Brent price of $65 per barrel. If Brent price were to stabilise at $75 then the value would increase by £2.5b ($10 increase generated additional $700m of cash flow) yielding a share price of 54p. This would put Harbour into the FTSE50.
This is realistically the maximum price we can hope for. We are no longer a high risk multi-bagger, but a large, stable and well capitalised business. Oil is still a demonised sector by the ESG brigade but we need oil and gas for decades to come as part of the energy transition.
You can wish for higher but I would be very happy with a 30-50% increase in share price over next 6-9 months.
Talk of oil going to one pound is fanciful. Opec will rebalance the market at oil above 80, no question about that. Extremely high price of oil is not good for the market. What we need is balance and a price between 70 and 80 suits everyone.
smalltrader-I agree.....the next six months are golden months in my view. Stock markets should continue to rise with all the QE. OPEC+ need to play ball but they should. Why? Too much revenue at stake for key countries and they need some much needed money from rising oil prices. This bodes well.
For PMO it's like a coiled spring about to be released. A confluence of factors (external) should see the SP on a steep upward trajectory.
Brent will exceed 120 dollars this year. And Soder tlw is a good investment. I have over 40k from around 20p so your be a little behind me but I expect at least £1.
Blades man I know. I think max 40p all things being equal but I have no clue what happens to oil in second half. This has been a violent move.
My trade was buy at 20 sell at 30. I think it has legs more now as oil moved so much. But 60p no way.
A share price is simply the valuation of the biz divided by the number of shares outstanding.
The valuation is the present value of future discounted cash flows of the company.
Oil complies are the easiest companies in the world to analyse. You have been given all the data you need. We know daily production so we can work our annual. We know how much they have hedged and at what price. We know what spot prices are. We know what their opex per barrel is. We know what the fixed costs of each biz is. Using all this we can model an ebitda number.
You can then model cash flows as we know capex, tax (there is none), cash interest (they told us net debt will be 3.2bn at close so assume 5% on that), working capital change will be minimal.
But a quicker back of the envelope analysts is to look a enterprise value (ev) and ev ebitda multiples in the market. I have looked at them all. The sector trades in between 5-6x at the moment.
Ebitda will be approx 2.2bn. Enterprise value is net debt plus mkt cap. So you can work out an implied mkt cap. Divide that by the number of shares post merger (they have also given us thAt) and you have a share price in usd. So use tax rate of 1.4 and you have a share price. It’s very very simple and gives so much confidence when putting in big trades. I don’t need to worry about short term sell offs cos I know what a company is worth and fundemantals always play through over time.
PAD, that is my thinking too. Look at the valuations of the growth companies. They don't have income/profit that matches the MCap but share price is 100-500% higher than their valuation. There are companies that have very high debts but market just looks at the forward potential and with Harbour energy, the potential is massive and low risk play among the NS producers and that is what anyone would look at before investing and with the current oil price looking to go above $75, we should see atleast 50p here soon?
Soder, 60p is thishful winking
as per the RNS, it appear s like the enlarged shares don't seem to get included straightaway on April 1st ?
If so then then I think shorts will just continue as it is now until the enlarged shares are issued to the lenders but we have now seen that SP has been rising steadily so am guessing that it is the retail investors like us that are pushing the SP and it will continue to do so in anticipation of the dividend. When the enlarged shares get included in September, again this is per Feb RNS then there is a possibility of some lenders dumping the shares including ARCM or they might hold for the dividend in which case we should see continuous rise of SP?
Not sure if I got the above correct. Appreciate if Soder or someone can advise.
Quite frankly most of what I read on this board is drivel. Momentum, confidence and oil prices post March will drive this, assuming OPEC+ plays ball. Backed this up with quite a chunk of money.
Soder, do you not see higher SP because of the enlarged shares coming into the market?
Come on then pad, tell us how? What are your assumptions for oil px and production and what ebitda and FCF does that get you to justify 60p?
You don’t have a clue. Fact.
Message should say NOT buying tullow. That’s a dog. Good biz but crap balance sheet. But tullow hold the keys to Guyana for eco Atlantic. Will have finished work over the next few weeks.
I do a lot of work on trades and only do a limited number of very high conviction trades. Maybe only 5-6 a year and if there is nothing that I like I won’t do any.
At the moment I own: save, heiq, pmo, ncyt and 2 large cos in rdsa and vod. But all in decent size.
This will double from here and then some by July.
I will eat my hat if this gets to 1 and gladly , with or without mayonnaise!
And re a 1 quid valuation, I have a valuation model I built on pmo that would put most city analysts to shame. As it’s not possible for them to magic production, I just tested what oil price they would need for my model to get to a quid share price.
Based on 210k bbl/d for 2021 and given the fact they are 50 percent oil and 50 per cent gas with 16m bbl oil hedged at 60 and 22m boe has hedged at 34 boe it would take a spot oil price of $190 for the unhedged production to get 100p share price. This is assuming a 6x ev ebitda multiple and fx rate of 1.4.
If you think that will happen I am more than happy to take the other side of that bet in what ever size you want to make it.
Hey. Not sold yet and without going into detail I can’t actually do it until after the deal closes. The sp has moved far quicker than I though off the back of oil moving far quicker.
It may be a risky trade and I am not there yet with my work but I am looking at tullow. But with a view to buying tullow as it has big problems but eco Atlantic who is a partner of theirs in Guyana. The way I see it is that tullow have a very small oil price window at the moment to refi their 21 and 22 maturities and could raise some equity and a convert to repair the balance sheet. To do that they need to sell an equity growth story to the market which they do t have at moment - cash going to repay debt not drill, decline production etc. The most obvious growth story to sell to raise equity Is drilling Guyana. Eco themselves have no production but the moment that tullow announce a drilling plan for Guyana then eco sp will double - minimum. The market not expecting much news from tullow until later in year but I think this oil move gives tullow a refi window they may use. Will see.
Soder did you sell out at 30p ? This is just where it gets interesting! people will now hold for dividends and stop day trading, so share prices should strengthen from now on and you will have to pay more if you want to be apart of the Harbour Energy Story.
Soder, correcto. 50p is best we can hope for in next 12 months
wow sounds like you sold too much of your stock too cheap and now you regret it! oh well thats just life.