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Alfa 1750mk1
I think that you are absolutely correct.
It is a real puzzle as to why the SP has performed as it has.
The market is a fickle mistress.
We can probably all remember when the oil price dropped to $20 and Shell dropped to £11.50 in spite of maintaining the dividend and offering a yield in excess of 10%, and the SP quickly bounced back. That was an utter nonsense, as Shell is an end to end producer and retailer and the oil price has relatively little impact on its profitability, only on its net asset value, temporarily.
RRE is more exposed to the oil price, but still profitable at these oil price levels, with no debt, so a low price has a temporary reduction on profitability, but as the SP is totally covered by cash in the bank, the SP seems to ignore the income stream anyway.
It would be very interesting to see what would happen to the SP if a special dividend of £15 per share were to be issued, I think that it would still be worth £10 per share - go on AA - I double dare you!
GLA. let's hope for a better week next week.
1750mk
Thanks for your input appreciated mate
my view fwiw ...
There was a run up with oil which had a pop at 70 ... we also had the (expected and not materially impacting) loss of operatorship at Brae with the Taqa case outcome ... which also threw up the childish 'wideboys' comment from leaked Taqa emails... throw in the virus situation building and oil dropping 30% from that spike.
There may have been some rebalancing to do by ii due to the spike up to 23 (that said, Cavendish added on the way down)... but my opinion is that there was a substantial sell order put in from someone that has needed to be worked (I think there was a big buy order too but outgunned by the sell)... that sell being worked has now run into the market going bat$hit and off a cliff.... and here we are, way under cash and hunting to spend it.
What was the sell off for in here lads before the coronavirus dump?
Just profit taking from near £23 high?
looks a good buy now, maybe wait for things to reverse fully first
Thanks all