RE:RE:Very frustratingfortunefavorsus wrote: I agree could move significantly higher soon. They could be doing a pair trade long some stocks and short Surge. I also think they believe some companies with buyback and dividends already or about to start will move first. They much higher oil prices have to have management rethinking timing of buybacks/dividends.
I agree. The short interest has increased since last month, and I noticed today that Questrade has a 32.12% borrow rate for selling SGY short right now. I suspect big money is selling SGY short and buying Suncor, CNQ etc to hedge their bets. They will buy a favorite in the industry and short sell a non favorite to hedge their bets. Favorites will typically go up more or down less than non favorites. Non favorites will typically go up less and down more than favorites. Hedging their bets will reduce their upside some but dramatically reduce their downside.
The longer oil stays in the range that it is, or above, will create pressure for SGY's stock price to increase but big money knows there is limited upside given SGY isn't a favorite in its market. Furthermore, there is probably a lot of people in at higher prices still wanting to get their money out (buyers prior to covid). Thus, more selling as the stock price increases.
So many investors have been burned by investing in oil-gas companies in the last 8 years, so there is a lot of trepidation. If they invest, they are likely to be drawn to the favorites. It is evident-- big names have gone up dramatically with the oil rally, but non favorites not so much.
SGY paying off a significant amount of debt and buying back shares will eventually help but that isn't happening over night so those possible future events are not going to change the current stock price.
Besides oil rallying significantly up, SGY selling itself or assets are the only things that I can see catapulting its share price in the short term. I don’t believe a merger would come with much upside. Maybe the market would like it and bid up both marginally.
My guess is SGY’s stock price will trade basically flat, but if it goes up or down it will not trend but rather jump in swings.