RE:Looking like the market wants another BXEThe deal is done, they cannot cancel it.
On the one hand, it is one of the rare firms out there that is still issuing equity after the ravages of the summer. On the other hand, nobody likes to be diluted. The signal is that the stock is highly valued, so naturally, everybody sells afterwards.
The whole sector is tanking massively today...I do not think they could support the $12 level even if they wanted to. That is actually not what they are paid for, they are paid for to place at a given price an offering and that is exactly what they achieved, and very swiftly.
I think there are two ways to play this sector:
1. Trading: In and out, betting on the upside and downside...with this kind of volatility, someone with talent can make a mint.
2. Long term investing: Take advantage of every dip in commodity prices to add to quality names (PPY, VET, EOG, etc.) and ride it all out for the next few years.
The danger for me is that I am often stuck in between: I want to be in for a few years, then the stock rises quickly, I think of selling, I do not, it drops, I regret my decision not to sell, I do not add more, it goes back up, I regret not having bought at the bottom, etc.
If you are like me, I think the best strategy is to devise rules and stick to them: Drop in commodities of more than 20%, add to quality names. Stock going up more than 50% in less than six months, sell half. Etc. Something I can live with, without all the regrets that come with missed opportunities.
My view is that the Montney is the EagleFord of the North (without the oil window but condensate rich and super thick). You are seeing, just like the EagleFord, improved drilling results over time by just about every good player in the play.
So the long term approach would be to tuck in some DEE, PPY, AAV, ECA, CR, etc. and just wait five years. Accumulate only on commodity price weakness, only sell if the company has a major adverse event and just wait...I think the news will be good in 2018 for these firms.
Just my two cents as I try to grapple with all this uncertainty and volatility. GLTA!