SU share price breaking out to the downsideI'm not a technical analyst.
I don't have MigraineCell's knowledge or experience with the oil industry
What I can do is look at and interpret numbers. To that end, the SU share price today has broken below recent lows. The one year price chart shows that the only time SU shares have traded below the current price was on the week of Sept 19, 2022 when it closed at $36.95 but actually traded down to $36.39. IF the SU share price doesn't recover by the end of the day, my guess is that it might test the year low. IF if breaks through the year low....I'm not a technical analyst :)
I don't dispute any of MigraineCell's data pointing to low reserves etc. and future demand etc.
What I see is a market that is expecting a 10%+ drop over the summer. I also see a market that wants to punish stocks even if companies "meet" concensus expectations. Basically, nobody wants to be in the market these days. With summer vacations on the horizon, there is very little appetite to be adding to anything.
The expectations for SU is that quarterly earnings will continue to decrease YoY which no investor wants to see. The same thing applies to most of the stocks out there, so I'm not picking on SU.
What is SU doing that would make somebody want to buy SU shares?
The new CEO is talking about cutting costs which is always a good thing. The company is reducing debt which is also a good thing but only to a point.
Public companies are built on their ability to leverage growth through inexpensive debt and the ability to raise capital. SU is doing neither. In fact, SU is shrinking capital by using its profits to pay back shareholders. Dividends are a good thing, but only if it doesn't come at the cost of growth. However, the market looks at companies that are paying big dividends but not growing as poor investments as they are viewed as not knowing what to do with their money (Experienced has also posted about this in the past).
I see a company that is attempting to "batten down the hatches" to squeeze out as much profit as it can for as long as it can. If that is the case, will the cash received in the form of dividends exceed the inevitable depreciation in share price? I don't think so but I could be wrong.