Baytex Energy Corp T.BTE

Why isn't this tracking Oil prices?

[doggiestyle]

Oil is up up almost %10 this week, and BTE is still stuck? Is there a big seller in the market unloading or WTF is going on?

[1234bmth]

unfortunately, this is how oil stocks are losing more value when they don't follow oil uptrend, but they follow oil down trend. If they follow oil price either upward or downward, then they keep their value in relation to oil price. That's why oil stocks are undervalued in relation to oil price.  

[1234bmth]

As an example BTE should have reached $12 to $14 when oil was $100+ for a while and with oil at current price BTE should be $9 to $10, but unfortunately this is how the market is working.  

[doggiestyle]

So much for what learned in business school that a stocks value is based on the "discounted value of future cash flows? If this were true BTE would be trading in the mid teens. 

[HighOctane89]

Yeah , it sticks in your throat when you think tech stocks get valued at 20X future SALES where as the O&G sector gets valued at 3X free cash flow . The media and government have demonized the sector so much that ownership support has been eroded to a fraction of what it should be  

[Snowballer]

exactly right. And at the same time the discount rate assumed is just plain wrong. The risk is continually underestimated and then overestimated... why you don't see a constant steady stock price. Which is why I think the best indicators are technical momentum signals (identifying the demand and supply of equities).   

[JohnnyDoe]

How are you arriving at your "should" price points?

[HighOctane89]

I wish I had a good answer for you but as I see it , it's just low liquidity . Buyers are in short supply at this time of year but there is so much negativity already factored in that when some interest returns the sector could rocket . Right now people are sitting on the sidelines , with a normal winter or colder than normal winter I'm sure interest and prices will begin to rise . I