RE:RE:RE:RE:RE:RE:Reflections The dividend yield on CJ will support its price. (Until such time as the dividend is considered at risk)
That doesn't mean those paying dividends don't rise and fall
It means when they fall there is an additional reason for some people to move money into them
CJ presently has a 7.75% yield. Rational investors don't give that up easily
The CJ case is a useful example of how this group all seem to trade at times, with strong correlation. The sort of correlation that comes from computer based trading
I suspect there are algorithms triggering algorithms.
At times they open up short term opportunities for rational investors - the CJ case may be one
Any fund wanting to buy a block of OBE May now find themselves with another opportunity staring at them
At other times they catch rational investors flat footed as they seem to trigger rapid moves to the upside
It was about 2 weeks ago that someone was buying OBE blocks
The general idea is to buy value when others are selling
There must be a lot of cash on the side lines right now. As soon as those people start to think they are missing out, they will come back in fast
Thinly traded stocks move up rapidly when buyers compete with each other
There was tangible excitement in the post AGM presentation. I'm having a hard time thinking about when I've witnessed that before - anywhere. Those presentations are usually stoic.
Do you remember the phrase "we are running"
Thats akin to saying "we're on fire". Have you ever heard that before in company prepared remarks - on a NY SEC regulated company? I don't think I have
Do you remember how Loukas ended the presentation - by saying he looked forward to speaking to investors on the phone!
That entire presentation was aimed at someone.
Is that someone a hand full of funds?
Is it someone who is kicking the tires and making low ball feeler offers?
What it's not is a bunch of light weight flighty over margined day traders with a gambling problem
Whoever that someone is, may be getting a private version of that tangible excitement directly from Loukas over the phone. Anyone hearing that, with cash on hand, will be thinking about putting it to work
Whatever OBEs 2023 BOE average turns out to be, will probably be achieved in March or April of 2023 - that's only 9-10 months away
Just look at OBEs own 2023 FFO forecast. That is based on $95 WTI. Make that WTI $110 or $120, and they are at 800-900 million FFO (using their own numbers). That's $10-11 FFO/share a year from now! (With zero net debt)
That's just below the current share price.
You don't get many opportunities to buy zero debt companies for one times FFO
It was about one and a half or two years ago now that I was discussing OBE with a friend of mine. I remember saying the whole thing could be bought for $35 million. She nodded but didn't buy. I bought my share.
I was concerned about the bankruptcy risk so bought others as well
Bankruptcy didn't happen. There is no risk of bankruptcy now.
Now there is fear of recession. I don't fear recession - I fear 500,000 per month US job loss. The US is still filling jobs - apparently there are about 2 jobs for every worker. The US is no where near sign of ant job loss
I can't tell the future but I do feel the probably CJs yield gets much higher or OBE trades for less than one times 2023 FFO is low
I sense fear in the air and excitement on the phone