Post by
Obscure1 on Jul 29, 2023 5:30pm
Flipping sides and bag holders
Kman says I have flipped sides.
I held ENB for a couple of years until it no longer made sense at which point I switched to SU which was trading in the low $20s. My exit decision to switch out of ENB was predicated upon the fact that ENB mgmt announced that they were changing their guidance from what had been a 12% CAGR to a 5% to 7% CAGR. I didn't particularly love SU at the time but it was the worst performing oilco coming out of negative oil prices after they cut their dividend and it didn't take a genius to figure out that oil wasn't going to remain at $20 per barrel. If selling an investment after a couple of years because the investment no longer meets one's investment objectives, then so be it.
My decision to exit SU after a couple of years came after watching a horde of fund managers get out in the low $50s and high $40s as they recognized that swimming upstream isn't worth it. Once I decided that I didn't know more than they did, I got out in the mid $40s. The people that have been getting out at $40 or below are making the same decision as they have finally recognized what is happening. The people that haven't sold yet will eventually get out but not until they run out of excuses. The people that they sell to will have an entirely new set of excuses and so on. Until SU management decides to do something different, nothing is going to change.
What would the share price of SU be if the company hadn't been buying back hundreds of millions of shares? How is that working out so far? At least the sellers are grateful for a bag holder that allows them to exit without getting skinned.