Member Info for Boyobach

Not sure what you are referring to Nomad - but if it's the buybacks thing then I'd welcome your thoughts about my approach. I'd be keen to try and improve it.

I'm not sure why LSE changed all my capital I's to lower case in that last post. They obviously don't like the old slang word for cigarette either. Never mind eh?

yes getafgrip - i agree with your comments.

my ‘back of a *** packet’ exercise has given me one way i can review the performance of an sp in the context of buybacks and have some idea of how it might have moved in their absence. and if shel halt or change their buyback policy then i’ve got some idea of how the market might react. i do still view buybacks as a disappointing use of funds that could either be channelled into business growth and development or into more direct returns to investors, despite the unjustified adverse media attention that that might receive (shareholders are worse off income wise than they were in 2019 whilst the sp is roughly the same).

still, if i was seriously upset about buybacks i should have moved on shouldn’t i? ha!

OCDO holding firm and finally pushing through the red downward daily trend this morning:

https://tvc-invdn-com.investing.com/data/tvc_b09d3dcc3ea969f6a67674cec937039b.png

There’s a lot of debate about buybacks here but, as no one appears to have attempted to check their impact on shareholder capital value, I thought I’d give it a go.

According to Macrotrends, Shell shares outstanding for the quarter ending June 30, 2023 were 3.407B, a 9.36% decline year-on-year. In order to maintain Market Cap I reckon the remaining shares would have needed to gain in value by 10.33% over the same period.

The underlying trend in sp (traced by the blue lines in the chart below) indicates a 10.57% increase in underlying sp over that period. Whether that was entirely due to buybacks is, of course, another matter but it is remarkably close to what might theoretically be expected. I'd personally still prefer to see restoration of divi.

https://tvc-invdn-com.investing.com/data/tvc_f4780b71bd29e3f92b9f6a909feb398a.png

I should add that, on a daily chart, this afternoon's mini rally didn't change the picture much and the immediate prospects are largely unchanged:

https://invst.ly/10zyoq

.... well, it was down but not out today! After a morning of further decline the afternoon saw some fight-back, especially at the closing auction, and it punctured the main downward trend (red) : https://invst.ly/10zxso

Tomorrow could be the decider regarding 860: break the red trend or….

https://invst.ly/10z63r (15’ trading type view)

Casapinos: Regarding institutions that have short positions: I’m aware that they have to report changes where they cross certain thresholds but, as I understand it, they may trade intra-day as much as they like without reporting providing they close within the reported limits. I hope someone will correct me if that is wrong. My assumption is that they are no more exposed to risk than ‘long’ investment companies and that, if an sp rises, they may not get burned by as much as people suppose if they trade it effectively. My simple rule is to not bet against them

860 held through Friday, will the pressure continue this week? https://invst.ly/10yx9n

A break upwards would be a significant sign of market confidence in the recent recovery. which has doubled the sp since early June: https://invst.ly/10yxei .

That Wall St article says:

'It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.'

It ignores the 'distribution' by way of buybacks - which are an additional cushion. Are they suggesting that Shell would continue their massive buyback policy if the dividend came under threat?

I agree with one point they make: 'It's disappointing to see the dividend has been cut at least once in the past'

Absolutely! Let's be clear, it's the main reason why CVX and XOM are 40% higher than Shel when compared to 2019 values: https://invst.ly/10yx2z

860 was likely to provide some support but there is still downward pressure: https://invst.ly/10y3ve

If it holds then we might see a levelling out.

Otherwise, of course, the drop back will continue.

The trend has reversed ......

Which trend is that cureboy? A 15" 'trading' type view of the last three days is negative :

https://invst.ly/10wwi5

As is the longer view daily chart: https://invst.ly/10wwg8

There was a bounce at around 860 a year ago but it doesn't have a strong track record as a support level. We'll soon know.

'so I'm expecting 1100p soon then who knows from there, probably a run to the all time highs medium term.'

All time highs are about 2900 How 'probable' is that in the medium term, given the current level of non-profitability?

Indeed Chilting.

Mind the gap down to 700, with support looking possible around 615: https://invst.ly/10wb-a

- it was heading fairly steadily towards that level before all the t/o rumours stoked the market, so it might hold if tested. And, of course, the Autostore news was good.

Failing that, then sentiment, along with the loss before tax of £(289)m and unchanged FY23 guidance could drag it lower.

With Shel in a downward trend for the last week (red in this 15” trading view) as OP has been rising, it’s coming onto my radar for a potential add, though still some way above where I’d be keenly interested. Firstly, will it drop below blue? And, secondly, does the much longer, 4 month green, indicate where the next low will lie? https://invst.ly/10ujlf

Last time OP was at the current level, in mid May, Shell was in the region of 2450 . So, along with other oil co’s, Shel does seem to have lost some ground sp wise since then.

Regarding buybacks, of which I'm not a fan:

They are classed as a ‘distribution’ to shareholders but , as I understand it, the company leaves shareholders to work out how much they are actually likely to be worth to them. I don’t think any guidance is offered - please correct me if I'm wrong.

In theory. for example, if a share is worth, say, £24 at the announcement of a buyback scheme which ultimately reduces the share count by 3% then, at the end of the process, the shares should be worth a little over 3% more, about £24.74, in order to preserve the market capitalisation at the time of announcement. Any deviation from that value can be attributed to market movement in the meantime - which can be quite significant. The anticipated benefit, in this example should therefore be approximately 74p.

How many PI’s actually bother to check whether this actually happens and build it into their expectations? More to the point: how many sell some shares in order to maintain their expected yield?

It might be better if the shares acquired in the buyback were re-distributed to the remaining shareholders: eg 1 bonus share for every 24 held.

Shel down 3%, BP and the others flat and Brent up 4%

https://invst.ly/10uh83

Which basically nullifies Shel’s gain against the others last week.

A picture can save a lot of words.

Plus the standout feature here is the likely gap fill to 775

https://invst.ly/10u73b

For those with short memories, the gap was created on 3rd March by the global banking crisis at the time.

The timing of today’s announcement re Luke Jensen turned yesterday’s sharp rise into a spike which did subsequently bounce to a higher level. Nevertheless, his departure may well blunt the market’s appetite to push the price much further and the closing doji of indecision seems a fair indication of a pause for reflection or even reversal.

https://invst.ly/10ttnu

For me it was a good point to take my chips off the table and see how things develop from here. OCDO’s volatility has always made it more of a punt than a carefully weighed investment and recent events haven’t changed my perception of it. Yesterday’s race to 960 together with today’s price antics presented a couple of nice profit opportunities and demonstrated, again, what OCDO is capable of achieving when the wind is blowing in the right direction. The next phase should establish a new baseline, albeit one that will be somewhat dependent on continued takeover speculation. Market sentiment is fickle and shorters will doubtless see opportunities to shake the tree again. Today’s action indicated some support in the mid 800’s - although it remains to be seen how robust that will prove to be if it gets tested.

https://invst.ly/10ttn8 .

I'll reacquire if/when the upside looks convincing. GLA

Not a great day, whatever the positives in today's update. We hardly need this chart to tell us that Shel is £1.50 under par in relation to OP: https://invst.ly/10tedm .

Still not cheap enough to make me consider adding, though. Today's early trading has left an gap down from yesterday's close to fill at some point.

https://invst.ly/10tefw