Always good to hear a differing view, although to me it sounds quite an emotive one expressing perhaps a short position.
As I have said previously though STO looks to be breaking even at $43 per barrel for 2016, yes opaque reporting certainly.
No management can be trusted, ultimately the high gearing and poor cashflows relate to the price of oil.
If you think that oil can remain below the breakeven of the lowest cost producer (the U.S. tight oil "play" Permian basin at $61 U.S per barrel) indefinitely then Santos is a candidate for bankruptcy (along with much of the oil and gas sector). Such a thesis would depend on our economy changing from being oil dependant which clearly isn't the case (yet) or the legions of desk bound analysts who think that laying off oil workers has made the industry more efficient so that depletion is no longer a reality.
In that context I don't see my investment in STO as "High risk". Technical analysis on the other hand is very high risk. It works until something unexpected happens when its practioners lose their shirts.
Sic semper erat, et sic semper erit (thus it has always been and thus it shall ever be).
Those who go against the crowd and are correct will see the real rewards. Followers are always at risk, whether that's the shareprice trend or the latest growth stock with fantastic management and a price to match.
Having said that I would not be surprised if STO falls back to $4, or at all bothered. In the long term $9 is a conservative valuation but a few hiccups are par for the course really.
I am surprised STO hasn't fallen with the price of oil. If it does I will be inclined to pick up a few more.
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$6.90 |
Change
-0.060(0.86%) |
Mkt cap ! $22.40B |
Open | High | Low | Value | Volume |
$6.97 | $6.99 | $6.89 | $75.56M | 10.79M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
18 | 101550 | $6.89 |
Sellers (Offers)
Price($) | Vol. | No. |
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$6.92 | 24252 | 7 |
View Market Depth
No. | Vol. | Price($) |
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9 | 24337 | 6.890 |
14 | 47404 | 6.880 |
7 | 26400 | 6.870 |
14 | 30290 | 6.860 |
29 | 59133 | 6.850 |
Price($) | Vol. | No. |
---|---|---|
6.920 | 22700 | 2 |
6.930 | 9333 | 2 |
7.000 | 628 | 1 |
7.020 | 13000 | 2 |
7.030 | 100000 | 1 |
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