Good figs. out today from RRE (as expected+ further positives) with intention to pay their 2nd divd for 2019.
I'd expect SQZ to do at least as well when they report shortly, inc hopefully, following through with their intention to get onto the divd list with their maiden distribution. What they have in common, of course, is an abundance of cash in the bank.
Until very recently, being over capitalised was considered to be an inefficient balance sheet profile but now, everybody is clamouring for liquidity as a form of 'life support' - how times have changed and in so short a time. Both remain amongst the safest havens to be involved with right now, imv - sasa.
Hi RELLIM - yes, it's been a long haul with it only really coming good over the past two or three years or so but it's a completely different enterprise nowadays...
Echo your comments about the outlook; 'every cloud, etc.," re: their acquisition plans - sasa.
Thanks for the warning, NewK - I did click on it before I saw your post but couldn't gain access as I'm not on Twitter, so hope I've not, unwittingly, imported anything sinister by only doing that - sasa.
out in about 10 days time / divd announcement - they should impress, given they cover last year's outcome (prior to all the shambles so far this year) when things were quite different.
Yes, the outlook might well presage a more cautious approach but the sizeable cash pile will engender considerable comfort going forward, quite apart from the range of other benefits SQZ enjoys and the BKR deal terms, etc., - sasa.
Hi NewK - like RELLIM, I'm retired, too and have been for a long time now (as you might have guessed) and my retirement pot has been battered significantly, as well but, as it's only on paper for now, it's relatively academic, if one looks at the historic charts on these things - medium / longer term and you don't need the money for a while...
Yes, it's painful while it lasts, of course but therein lies opportunity for corporates and investors alike and SQZ would, indeed, be increasingly vulnerable to an approach if they come in with the 30p eps or more that I'm expecting to be reported (p/e of 2.5 x currently) and such an under valuation would surely command a much higher sp than we see now if a deal was contemplated - sasa.
I guess that I must be a bit older than you, upomega, as I went through the '72 - '74 bear mkt, too (down 73% in 18 months) but you're right, this time it is different. It's different because all the previous 'crashes' were financially driven, whereas this time it's virus driven, bringing a major economic slowdown (at best) in its wake and nobody knows what the ultimate cost will be.
The common factor of all of them, though, is that panics eventually subside and rationale slowly regains its poise - how long it will take for that to happen this time, I've no idea but it will regain the ascendancy at some point. When it does so, much of this 'double whammy' / the dreadful suffering associated with it, will slowly fade away and the rebuilding of lives and the confidence of the mkts, too, will return to the fore...
Meanwhile, I think the best thing to do while we wait this out is to hold the most resilient stocks, like those involved in essential industries (food, drugs, energy, etc.,) and, ideally, those undertakings with good management, strong balance sheets with little or no debt and in our case having lots of cash in hand - the last being the most crucial asset to boost survivorship during this period of financial attrition.
In a fortnight or so, we'll know how Serica fared last year and I expect the results to be impressive and for them to easily afford to pay their maiden divd and gain some kudos in doing so but they might decide to be extra cautious in deciding to defer it for now but, either way, SQZ must rank amongst the safest counters around right now, imv... sasa.
embargo on corporate announcements from 5th April onwards, we should have the 2019 results from Serica out as planned, then, i.e, in a couple of weeks time with the divd question answered one way or the other; today's higher sp being an indicator? - sasa.
Maybe 'cos it's the only one in the FTSE100, Marty - if gold is perceived to be going up, the Instos / trackers will be interested in this, given its status, especially the latter...
Just my take, anyway, fwiw... - sasa.
With the oil price sagging around the $27 Brent level right now, the 80% gas exposure SQZ has in its mix looks preferable / fortunate, I'd say...
Once the SA / Russia spat is over and oil production is meaningfully reduced for the economic good, the oil price should usefully recover, of course but for now, gas seems more comforting; RRE favours that fuel looking ahead, too - sasa.
Hi Samurai - not wishing to put a dampner on your preference but I think that HOC has now suspended their Peruvian mining ops. like so many others are doing so currently.
Hope POLY and HGM, for that matter, are able to continue unaffected / still paying their divds, etc., - if they can manage that, inspite of the covid - 19 threat, they're likely to command a premium for the duration, I'd have thought... GL, anyway - sasa.
Quite so, Newk - the downside protection Serica has under the terms of the BKR deal is prescient now and valuable too, to say the least, not to mention the increasing share of that production this year and next. SQZ also sells on a lower multiple than RRE and probably prospectively, too ( I calculate that they should come in with 30p eps or so for 2019 to make for a p/e of around 2.5 x currently ) and that's really cheap!
Both seem about the best stocks to hold right now for the reasons already mentioned and when sentiment generally recovers, well, - say no more... sasa.
Just announced, the attraction of gold & silver, especially AU in being the ultimate store of value / hard currency, merely increases, to the detriment of fiat money's buying power.
Those with cash in hand having sold some holdings and have added to their funds on deposit, now face the prospect of zero interest, or even negative rates coming up on their money. Ergo, quality gold producers, like this one (paying a decent divd, too) should come into their own again and being in the FTSE 100, Insto demand for POLY looks likely, too.
Good place to be right now, imv - sasa.
Hi JAdam - nice to see you on here and contemplating taking an interest when the sp suits...
RRE and SQZ are like 'two peas in the same pod', imv - both have proactive / good management (Serica's being a bit more seasoned, co's they've been around in this game for longer) and their strong, debt free, balance sheets with huge cash accruals, marks them out to be about the best situations to invest in, especially given today's difficult conditions, that I've come across, fwiw...
Serica has less cash, pro rata, their sp whereas RRE has 3 x more in the bank than their mkt cap, with the business thrown in for nothing! - quite an exceptional anomaly in my experience.
SQZ is 80% gas / 20% oil and their op. costs are around $13 boepd whereas RRE is 60% oil / 40% gas with their op. costs being around $ 29 boepd but both are striving to get these lower... Many have speculated that the two might merge, given the obvious synergies applicable, especially in this problematic environment where a cautious approach, for now, seems sensible and there is, perhaps, merit in this argument, in lieu of pursuing their own acquisition strategies, regardless...
When they get to publishing their respective 2019 F/Y end results and, hopefully, Serica joins RRE in being a dividend payer, which they will well be able to do, I'd expect both of them to re-rate significantly from here. A resolution of the SA / Russian oil 'dumping' spat and an end to this evil coronavirus pandemic will set the stage for a dramatic upturn in their sps, I have no doubt.
Meanwhile, both afford exceptional defensive qualities in this anxious climate, augmented by considerable growth potential once things get back to normal - hence being 'over weight' in them currently and am happy to be so for the duration...
Anyway, I hope that helps your deliberations in wondering whether RRE would make a good 'sidekick' for running on with SQZ looking ahead. ATB - sasa.
I can't think of two better stocks than RRE and SQZ to be holding in this anxious mkt. They both have loads of cash (especially RRE) / no debts / good management and we're likely to see an upturn in energy prices soon. Coiled springs + major defensive qualities they offer right now, imv.
Many industrial firms would die for such characteristics at present and sadly, many will after all this attrition.... Along with these premium 'oilies', some gold producing miners and pharmas actively searching for the antidote to this evil bug seem about the best areas to be involved with currently. Just sayin' - sasa.
Thanks for the 'heads up' on this one (via the AMC bb recently) Henners - much obliged.
Have added this to my NCYT position, fwiw and both look particularly well positioned in protecting us all from this pernicious bug - that's very laudable in itself! - sasa.