Member Info for Boyobach

Pokerchips would have been the best responder to that but he's taking a break from here it seems. Others here, too, will have a range of valid views

My perspective is simply that there are obviously a lot of headwinds right now for RDS and 2020 has upended the market. So, who knows about £20+? let's get back over £10 first. On production, the US shale industry got itself into trouble by focussing on volume as a means of making profit out of ever decreasing margins. I think Shell is smarter than that - otherwise I wouldn't still be invested in it. The world is oversupplied with oil currently because indebted producers had to increase volume as prices fell in order to pay creditors whilst their investors lost money. If RDS can increase market share without this negative effect then OK - but focussing on a green future is surely the way forward? I'd put that above merely getting the sp back to £20 asap as a priority. If they do the right things then the sp will look after itself. If they do the wrong things then RDS could be past it's peak - a dying red star maybe. Just IMO.

I'd echo all the positive points on this thread. Once RDS gets its strategy across to the markets and convinces them that it has a credible plan then we should see a more realistic sp. GLA

Very probably, Grippa. RDS seems to be in a phase where it is closely tracking OP.
RDS moves between price levels based on long term fundamentals and market sentiment. Once at a given level it seems to resume the closer tracking of OP, amongst all the other noise. My observation is that a $1 shift in Brent might shift RDS by around 20p. It's hardly going to get the sp back above £12 on its own anytime soon at that rate. Sometimes OP shifts for more fundamental (rather than temporary) reasons and the effect is then amplified by market sentiment etc etc.
For LT holders, only significant and lasting shifts in OP are relevant - different if you are a trader.

Excellent work Marfthew.
I must look again at the monthly.

A rubbish day for RDS today , possibly stuck in the doldrums until they can convince the markets that they’ve got a vision for the future and the drive and ability to deliver upon it. The long term downtrend is shown a bit more accurately here than in last night’s post although there was no obvious sign of it being tested today or anytime this week. Until it is broken through it remains a threat, of course.(15’ view):
https://invst.ly/sdw56

Traded volumes dropping back to lower levels after last week too (lower part of daily tick view): https://invst.ly/sdwue

Good for you Marfthew - though not much of a margin on that trade unfortunately.

Well market cap has cratered because of knee-jerk market reaction hasn't it?
I guess you could make a number of arguments, but mine would be to take the recently quoted analyst consensus (I'm trying not to wretch as cannot believe I'm saying this) which was slightly above £15 I think. That would increase 'projected' mark cap by about 66% and make the debt ratio look a whole lot different. Equally you could start to consider RDS as a business that is no longer mature but developing. It's interesting that RDS has been criticised for disposal of assets and declining production - yet over production is what has sunk the sector and why would they need the assets if they are serious about moving away from fossil? I imagine that selling assets before the covid crash was probably a good idea? Anyway, ask ten people you'll get ten different views. I'm not sure I'd leap in up to my waist right now - toes in the water seem a good idea. Check out Marfthew's comments - he's trading closer to 'scalping level' than interests me right now, although I might have to change my strategy to something similar if this dead cat has used up it's penultimate life. Ha!

Hi Grippa.
I think you were chatting to Pokerchips a few days ago? Regrettably he has said he's taking a break from here for reasons explained in his last post. He'd probably have answered best but here's one article to read if you haven't already:
Poor results even before the pandemic
Shell was unable to grow its earnings even before the pandemic. As a result, it has posted poor results for six quarters in a row. The primary reason behind the lackluster business performance is the inability of Shell to grow its production in the last two years.
https://seekingalpha.com/article/4377357-why-stock-of-royal-dutch-shell-collapsed-near-25-year-lows

I avoid speculating about years, Char. After all, we've seen what can happen in a few months - and it ain't over yet.
The first phase of recovery is survival - let's see how RDS copes with that.
No one actually knows what our day to day lifestyle is going to be like next year, let alone further down the track.
RDS is a large organisation with a fully functioning and viable core business that provides sources of energy and essential chemicals. Unlike a tech company - Apple say - where the issue of a dud i-phone and a change in consumer-led fashion could trigger swift collapse, or airlines that had vast amounts of regular business switched off within weeks - RDS has the ability to respond and adjust over time. Is energy - the average cost per KWh across all usage - actually going to get cheaper as we transition to low carbon? And is the net amount of energy required going to decline? If RDS is in the right place producing the right stuff it should do fine. Unfortunately, investors can't expect high dividends from a company that needs to use cash to change, so the profile of RDS investors is presumably changing - as institutions like pension funds headed for the exit the sp was bound to fall.
However, it is a global utility - so eventually they'll be back.

Very feeble performance today: the two day rally is over and the long term down-trend doesn't look like being challenged in the slightest, so it's still effectively in control.
Was that the bottom? Quite possibly not.

Absolutely correct Hydrogen! Good to hear from you. Wish I'd followed your advice.
Ha!
As prices fell I needed to balance out a very overweight G position - which I managed to do with some gain rather than loss.
However, I moved some funds into the 'safety' of RDS in the process which subsequently fell whilst my attention was elsewhere (never trust a supposedly solid and boring investment), so I now have a recovery task - not major but 'interesting'. Everyone needs a hobby in lockdown!
Fortunately SOLI and CWR have compensated. The RDS chat here on LSE is weird - some obvious trolling, really quite unpleasant.
Hope you are doing Ok during the covid drama - and also in G if you still are. ATB

Hey Marfthew - You are probably asking the wrong guy because there'd be insufficient gain for me in selling at 980 given my overall position. For you it might be very different, in which case I'd trot out the old - but safe - cliché that it's never wrong to take a profit. Yes, it could drop back but I don't personally think it will significantly. I also think that Trump has a vested interest in keeping Wall St happy and projecting a positive economic vibe as the election approaches - so any negative tweet effect on the market will probably be temporary - they usually are anyway. His election advisors are probably cajoling him tonight. I'm positive about RDS at the moment and personally don't anticipate selling below £13 unless I feel there are sufficient signs of a significant pull back - I might well put stop losses in place and adjust them up as the price advances past certain thresholds but I'm not setting them till it's over 1000. Hope that helps.

It’s a great pity if Pokerchips decides to stop posting here.

There is certainly too much personal invective on this board and, like anywhere in social media, it escalates ferociously in the echo chamber once someone takes offence and retaliates - even if they have done so through misunderstanding or over-sensitivity.

This is only a discussion board: it’s not hard to apologise and certainly not worth getting emotional about. If the debate here isn’t sufficiently focussed or not to your taste then it’s easy to move on or mute the ones you aren’t interested in.

Banter can be tricky because the threshold between ‘having a laugh’ and taking offence varies hugely from person to person. It doesn’t bother boyoberk but continuing to throw highly personal comments at someone who protests is not banter - it’s bullying. Those that persist are obviously rather obsessive or need the attention (the clue there is great long abusive monologues). Filtering them is inevitably the best response and also clears the dross from your screen.

‘Filters’ is the third tab immediately above ‘post new message’ at the top of the posts

Now - can we talk about RDS please?

Yes Leem - RDS has become more of a preoccupation for me than it should have been.
It has been extraordinarily weak since June and whilst its sheer size should have carried it through the turbulent times it is a disadvantage when quickly adapting to fundamental challenges - low carbon future, covid demand shock and long term oil surplus. I don't like chasing shares downwards - I've learned that you should never start when they are still on a long negative slope (hitting the bottom is never a certainty) and that averaging down just adds exposure at increasingly high risk - especially if you are too quick topping up each time. Nowadays I look for share that are on a positive trend but far from toppy. RDS has turned into a struggle which won't be over for a good while.

A good day overall, even though RDS tested resistance at 965 but fell back rather than taking it. It's also inching closer to breaking out of the downward trend (red) that has dominated since early June and which is currently at around 980: https://invst.ly/sdeq9
That is the trend that took RDS down through £11.90 support at the end of July and eventually brought it to 890 last week. It’s a long haul back - two months to come down but with nearly three to the year end there may even be some prospect of £12 by end December for the optimistic amongst us.
Here’s the 15’ view, with the downtrend shown only roughly in position as its origins are off the chart at this scale : https://invst.ly/sdev5
A close above 965 tomorrow would mark significant progress in the current context.

....but accelerating since my last post! Good work by RDS so far today, let's hope it is sustained when the US starts trading:
https://invst.ly/sdbto

Recapturing the 965 level today, by closing above it, would be a significant positive signal.

I think we should take the Brent oil price with a pinch of salt at present in relation to the Shell SP....

As I often point out with comparison charts:
‘Oil Co share prices track Brent except when they don't.’
The influence of Brent will sometimes dominate whilst at other times it is outweighed by other factors. WTI becomes rather more important regarding on-shore US production and operations but, even then, WTI and Brent track each other in terms of variation much of the time - last April being a notorious exception, of course!

The rate of improvement in SP since the recent low is fairly symmetrical with the falling trend leading up to it. Both are similar to current trends in Brent (green trace) over the period in this 15’ chart: https://invst.ly/sd8f6

But RDS obviously needs to do much more than just track Brent - as the wider view of the same chart from mid September demonstrates: https://invst.ly/sd920 It has a lot of catching up to do in order to get back to respectable levels.

Pokerchips & Barrieprov:
I generally go with Pokerchips' comments regarding the issue of restoring the Divi. However, I was attempting to answer Neversellshell's question and plainly that needed quite a few 'ifs' and 'buts' .
I realise that the market has historically based RDS' sp on its yield rather than its growth so, unless there's a clear path towards progressive improvement of dividend, I think prospects for the sp are going to be quite limited. Indeed, on the basis of yield alone, the current sp is very good compared to the sp a year ago. So one could argue (I'm not btw) that the sp isn't going anywhere from here. In the end there's going to be a fair value for Shell's sp at $60 Brent (as per the question) and I plumped for 1700 with the proviso that improving the dividend might boost that further. I wasn't arguing in favour of increasing the dividend as I believe , similarly to Pokerchips, that RDS will need to target its cashflows very prudently.

Tanking? RDS, BP and GKP all up I think.
G got stuffed in the last half hour unfortunately.