moemoney42:servicing debt just means interest payments,My point is that it would take 3 years of free cashflow at 80wti (and we both know we can't count on that) but assuming 80 wti) it would take 3 years of freee cashflow just to pay off debt, That is the killer to me.
A lot of companies out there would free cashflow in the 20% range at 80 wti with little or no debt, certainly not 3 years of free cashflow worth. I was lucky enough to have paid the insurance of holding most of my holdings of CPG in nov $11 calls. This sector is a S-show as it is shorted into the floorboards as a way to play slowing economy. Inventory draws are ignored, the NY J's control the narritive. In this case it's fears that demand will fall off a cliff as the economy slows--we both know this isn't the case, but that's the perception. And selling triggerrs the technicals to look ugly and momentum picks up to the downside.
I have felt the pain in this sector off and on for decades.