Member Info for tazed

TerryM1

I do feel for those that suffering from the highs, part of the issue with the stock price is its being day traded, this is compounded by shorts, to break the the mold of both you need very high volume and momentum over a long period of time which what we not seeing yet.

The Russell inclusion would impact this a little but may not be for long enough hence my guess the shorts hanging around.

Value normally comes good in the end just a case of when, they are ultimately extracting a resource that is needed and hedged.

FREE Cash flow is good and cash is king, eventually people will come looking in a lower intrest rate environment and as news around company becomes very old news. I remember when ppl said Microsoft was dead then eventually recovered. I know Dec not Microsoft but ultimately if there are solid financials then the SP will come good. If financials fail to impress then we stuck sideways.

I also tend to look at how peers are valued, with Dec have high margins without the risk of exploration and drilling, of course they have the risk of capping though. But 50% margins and revenue that is greater then is EV/mkt cap I still think Dec should be valued way more.

However not sure if or when it get to it previous highs. I sure I also have to make call at some point.

DYOR

Looks like shorts holding out despite russell inclusion inbound, there was approx 5 days to clear position. I must admit I am surprised as they also need to pay dividend

Clearly still bearish

No problem, I do not plan to reinvest my dividend simply due weighting this now has and my lowish entry of £9.35 so do not need to average down like a lot do.

Yep the probably been some changes overall II are keen it seems.

I almost do not want them to reduce debt lol..As right now someone can buy Dec outright for cheap.

@ dazzle1000

132 million across two quarters, see near bottom of page

https://www.defenseworld.net/2024/05/31/ubs-group-ag-makes-new-15-87-million-investment-in-diversified-energy-company-plc-nysedec.html

What is the ownership structure of DEC?

Owner Type Number of Shares Ownership Percentage

Public Companies 32,003 0.0676%

Private Companies 118,233 0.25%

Individual Insiders 1,710,655 3.61%

General Public 8,041,077 17%

Institutions 37,439,169 79.1%

Looking at the amounts might even be a bot, looks price linked wither way though I agree

To be fair I could be asking you same question.. I would not class myself as being successful but been at this a long time and have been more fortunate recently as taken advantage of some bargain stocks.

I made it clear I do have other stocks but most are more active in the main communities I chat and discuss stocks on, fortunate there better moderated, while all for opinions see some are more useful then others.

I am keen to get others insight in stock that I have heavy investment in so more active.

Cannot figure what motivation you have? Care to share

£2m UT was intresting never been that high before

Suspect a price target in mind

TerryM1

The shares are simply traded on the exhanges they do not hold the stock/shares. as shares is share and held by individuals or II.

I guess the question are there more buyers on one exchange or not and suggests a bias to a region as Europeans would probably but on LSE and Americans/Canadians on NYSE, but that not always the case as anyone can buy from either, some may play the forex game and buty on NYSE but like in UK and also no stamp duty.

Not really as hoping for more price appreciation and so holding for longer there maybe a point where that changes or continue to hold for long as feel there value or something else I want to buy

Partial correct, I live in UK and dividends are taxed as part of income after £500 year and I have no control soon as they dividends are issued to me they are issued, however I can sell of chunks of my IAG investment using capital gains allowance that we get each tax year in UK making not eligible for tax. So can do this is tax efficient way.

Yes I expected more sp appreciation and to fair my time horizon is long it not just about dividends it about total returns plus IAG is in a taxable account, IAG will in future will issue dividends again but I probably sell before then..

"Tazed

Sort of agree with you assessment on time scales but what is DEC recovering from, I guess the low SP, HH, high interest rates and trashing of the dividends but the profits have help up due to hedging. HH retuning to normal an had little effect on DEC due to hedging and interest rate will be lower in near future. The 2 parts which are specific to DEC are the new fixed high cost debt for 9 years (hedges only up to 3 years) as interest rates likely to fall and the dividend which was said to be safe trashed, otherwise we are in the same position as most other companies except the SP is in the gutter. These look like self inflicted wounds from which we need to recover."

Yes all very valid points we never be favoured over some other stocks out there but firm believer that value eventually pushes through and expect dividend to return higher as growth, does but there risk of lost sideways.

I see that with IAG I payed average of 97.48p yes that not a typo!

I now have return of 74.4% as not stands at 170p

Despite good returns since covid is now stuck in holding pattern pardon the pun.

Yes the financials scream buy me, PE

"tazed, you don't see any advantage in selling for your 35% or so profit, and re-investing elsewhere ? In your timeframe, that 5 years could give a decent dividend return elsewhere, here you'd just be sitting on an unrealised profit and the risk that this share goes nowhere. Which leads me to my next question - where do you see the catalyst for the rise you're hoping for here coming from ?"

I set a price in mind as I believe there to be more upside my target of £14-15 per share, so know it will take approx three years to get there. So I would be leaving money on the table if I sold now, so believe it to be £20+

The best investors say you should not even invest in something if know you going to sell but hay ho!

In my opinion what the II seem to have realised and hence there heavy investment over last two quarters is that DEC is pivoting its strategy away from the focus of being pure income play and being bit more of growth and income play, that has come at massive cost to RIs and share price. They also know dividends do not play well in the US due to the taxations and other elements, so one way is to use dividends to pivot into growth and buy back shares, I actually prefer when some money is being used to grow revenues like buy more wells or grow the NextLVL part of the business.

I also like the fact that 6% inside ownership means they have skin in the game when it comes to the business and SP. This may not seem that way right now though, but some of them have lost just as much as RI with the recent drop.

We need to understand non ESG stocks are normally unloved and therefore typically undervalued, and also in high interest wnvironment ppl will pick the darling stocks as like to call them!

The way I look at this they have more revenue then market cap, despite the debt which they are also reducing, so at some point the market going to say hang on, solid revenue from cyclical commodiate that hedged, lower debt, share buybacks, comfortable dividend ratio, good ROIC.

We have the inbound inclusion in the russell index that will force a buying of shares and also any funds that then link them self to the index.

Typically fundamentals normally flow into stock price eventually, but the bargins are when there is disconnect. This wil not be one of those quick bounce backs.

While this still paying decent dividend of around 7% for me happy that this good enough and stable enough right now for me to hold out.

The analysts view:

The range of stock forecasts for DEC.L is 1,025.15 - 3,150 GBP. Based on the ratings of 13 analysts, the consensus recommendation for DEC.L is Buy.

Valuation model:

DCF (Growth Exit 5Y) (8,559.21) -874.6% (FAIL)

Peter Lynch Fair Value 6,221.18 463% (PASS)

P/E Multiples 13,881.02 1156.2% (PASS)

EV/EBITDA Multiples 849.34 -23.1% (FAIL)

Earnings Power Value 4,175.11 277.8% (PASS)

There business model make traditional valuations more difficult so focusing also on FCF.

Feel this will be a slow burn recovery, as they are basically pivoting the business model and I personal see this as a three year plan with possibly a 4-5 year time horizon of recovery. Not the best for holders that were at the highs and imagine even those like me who came in at lows it long time horizon.

With intrest rate still high there a lot undervalued stocks and so companies have made the call to reallocate capital to buy shares, soon as intrest rate start to fall stocks/investments start to look attractive again.

If can currently earn 5% safely then why risk it couple of more % is want the average person is thinking.

Key is also look at what II are doing in markets like this as they are typically buying.

Also keep ie on the numbers of company and it valuations

DYOR

See RNS

https://www.lse.co.uk/rns/DEC/

I do focus on current and future, but the when comes to so valuations you have to look at the past.

To be honest the Dec model of operation is not the norm so valuation is harder to model

But when revenue is greater than mkt cap you know something is not aligned let's see where we eventually end up but as said this 3yr horizon if I am willing to wait

2019: $69.22 million [USD]

2020: $246.84 million [USD]

2021: $93.91 million [USD]

2022: -$17.32 million [USD] (negative)

2023: $73.55 million [USD]

No technically true they do not have the cash, just look at fcf