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Its quite clear that a large holder has been dumping the stock today. It may take a few days before they are finished but then i expect the stock to rebound.
I am very bullish on RIO in the long term, but in the short term i see more downside from a technical standpoint, there is a clear head and shoulders formation that started in 2020 and we are now descending to complete the formation, i see this stock reaching levels of £39/£40 and then rebounding and that where i will be buying. Fibonacci and Bollinger also signalling more downside to come.
Great stock to hold for the long term and div yield is very attractive.
I did my research on this company and bought today because of the very attractive div yield and in anticipation of tomorrow's results which should have improved since last year. Why? Because interest rates have risen since last year, equity indices are at higher levels and the GBP had not appreciated versus the SEK since last year, albeit it has vs the EUR. Overall many of the exogenous factors are in their favour.
What are people's view on this REIT?I took some profit on RDSB today (up +45%) and with the proceeds bought today AEWU for the 9.75% dividend yield, discount to NAV, low beta and low rate of non payments rent.
Tullow just awarded Maersk drillling a $370 million contract this morning, if the management didnt think that the RBL would not go ahead they would not be awarding new ddrilling comtracts like that.
With Oil price rising, interest rates at historical lows and Tullow already having disposed of assets to reduce leverage, I dont see why the RBL would not be renewed.
Many investors are scared that the bond holders will have the 2022 and 2025 bonds converted to equity, but from a bondholder perspective I just dont see why that would be desireable or why they would agree to that given that being a equity holder would place you lower down the capital structure with no claim on the assets of the company, being bond holders they are higher up the hierarchy and have a better chance of getting back their capital paid back as they cam go after the assets in the worst case event.
Many of the brokers covering Tullow seem to have apocalyptic price forecasts that do not make much sense to me.
Bonds have only been coming down in the month of January, the bonds maturing in 2022 have been climbing from the 50s and reached high 80s in January, now trading in the low 80s.
The convertible bond is trading in the low 90s.
My read from this is that the bond market is reflecting some degree of risk but they are not trading at distressed levels.
Tullow the 7th most shortee stock in the UK:
https://uk.advfn.com/toplists/free/most_shorted
As of today we have 19 analyst covering Tullow, 3 have a buy rating, 10 have a hold rating and 6 have a sell rating. The following brokers have updated their rating today:
Morgan Stanley: Equalweight, Target: 0.41
Investec: Buy, target: 0.50
JP Morgan: Neutral, target: 0.26
Jefferies: underperform, target 0.13
Stifel: Sell, target: 0.01
Renaissance Capital: Hold, target 0.20
Peel Hunt: Buy, target 0.40
Barclays: Equalweight, target 0.34
I think the news is quite encouraging on the whole and somewhat understated in the tone, the SP reaction should be positive so Im guessing that the ongoing debt negotiations is the fly in the ointment. But i think once the sell side analysts have had time to digest the update, we could see some upgrades in terms of ratings and price targets.
When entering a trade one always has to assess the bear case and not just the bull case. In other words before i buy a stock (or a bond for that matter) an investor should not just think of blue skies but also estimate what is the worst case scenario that could possibly play out. Its important to have this in mind so that one can decide how much risk you are willing to take.
Its also important to weight the downside with the possible upside, in the case of Tullow the possible downside risk exists and presents a low probability but high impact scenario, this risk is by the way largely priced in, but i think this risk is far outweighted by the upside potential which is far greater than the downside at current levels.
Im not sure why so many people got upset about my assessment which is balanced, to ignore any risk in an investment is a sure sign of cognitive dissonance.
@latpulldown, you have clearly not bothered to read my posts l, i have stated that i believe the SP will go to GBP 1.00 in 1 year. I think you just relish being antagonistic.
@brocksford, i bought first batch yesterday, will buy another tranche if/when we see a bigger move down in markets.
@Elll, i am not trying to scare anyone, i am bullish on Tullow but a lower oil price cannot be ruled out if we have an combination increase production from Opec members and a fall in oil demand due to lower economic activity. These factors might be already known to you but im just sharing my thoughts.
@latpulldown, FYI im an investment manager hence my venacular and i suspect i that i have probably conducted a lot more research and due dilligence on atullow than you have.
I have spent a few days diving into the financials of this company and my verdict is the following: the company is in a precarious financial situation with a high debt load and facing lower production. The outcome from here is binary, if the company manages to stay on top of its debt and oil prices maintain at current levels i expect share price to be above £1.00 12 months from now. If however the oil price falls down below $30 and the banks close in and they are not able to service their debt then equit holders face total wipeout. I think that this outcome is unlikely and that sharebprice will be considerably higher in the longer term as the market is currently not reflecting the benefit that abhigher oil price brings to Tullow.
There cannot be more shares bought than sold, for every buy there is an offsetting sale.
My guess is that this is the reason Shell pulled out, which if this is the reason would not reflect so badly on VLS and would in fact reflect badly on RDSB. My guess is that as these people are no longer at Shell, some of the green projects got dumped:
https://www.offshore-energy.biz/shell-executives-quit-over-green-transition-disagreements/
Hi CSDI, sorry for late reply, i have no doubt that RDSB will go back to £20 within the next 12 months.
If you are in a SIPP structure your options are quite limited for going short but i think you can still buy Short reverse ETFs on Tesla. I went short by buying put warrants but there are other means, such as going short via CFD and buying puts.
There are some very decent high quality shares on the continent but the main issue i have is that many dont offer dividend reinvestment plan like most do in the UK.
Hi CSDI,
I got in today at 1.08, after having followed the SP for several months. My aim is to top up the position over time and hold it for life as it is one of the very shares that has an almost recession proof business model IMO. I am also holder of RDSB (average price of £10, manage to buy a tranche at £8.60), GSK, MNG, Bayer, Danone and Enagas.
I have some growth stocks that have given me more than +100% returns (lemonade, palantir) but i dont sleep well with these stocks and only buy growth stocks in order to grow my asset base and then buy high divvy stocks. Im also a holder of VLS and im short Tesla.
Good luck!