Post by
mrmomo on Aug 16, 2023 10:18am
Math for (G)ummies............8)
Just a follow up from my previous post on here, and a few extra things for you guys to think about before you guys all congradulate each other, patting yourselves on the shoulder for "JOB well done" while jumping in glee slapping numerous High- Fives. And espeically for those new naive & gullible investors, who are seriously thinking about Fomo'ing into the stock, thinking, believing all this hype that's it's cheap at these levels.
For those of you still not TOTALLY convinced, not so easily willing to blindly follow the Z173, Lifesgood & MaTT Mariachi Band to the Promissed Land, while they play their banjos & sing their many songs of praises to the masses of all the benefits of being a Suncor s/h due to the "wonderous" Q2 they "suposedly" just had, while in the background all the SU cheerleaders enjoy the festivities, with fireworks included, hoping to score big by wacking the Suncor pinata...... i first suggest BEFORE you do ANYTHING or make ANY move, to listen to the following. As it MAY just save from making a HUGE mistake!
As i've stated, i'm NOT a s/h at this time, and haven't been one for many years. And the odds odf me being one in the future are zero to nil. So i'm not really all that interested in their financials & if they're profitable or not. In contrast to me for many here, those quarterly results may be VERY relevant if one IS or has been a long term loyal s/h who plans to stick around for the long haul. Therefore, since some of you are or plan to be, i just thought you may want to know a few "critical" things, thnngs that were NOT mentioned at all on here (for several reason which i won't get into now) before you actually become one or continue to stay as one.
So what or where should a SU s/h look for in that report and what was posted in terms of numbers & figures in their Q2. If ONE actually does their due diligence, and looks closely at the ACTUAL numbers, you'll SEE that Suncor has a ......how should i say this?......a sort of "dilemma" on their hands. And i'm not talking about the Fort Hills "situation".......their OTHER nagging thorn in their side. Nope.....i'm talkong about viability & sustainability of operations in conjuction with their Balance Sheet.
You see.....they kinda have a problem on their hands. Based on those numbers they posted, though they posted a nice "profit" for the qtr and are cash flow positive, the numbers are a little deceptive, misleading, and could spell trouble IF you don't know WHAT to look for and what they mean. If you're STILL confused and/or not totally convinced, thinking this is all 8S, let me just stop you right here and give you an option to exit this post before wasting anymore of your time.........
If you've decided to stay & read on, interested in listening to what i have to say, i'll give you an alternative, a different pov & perspective than the one currently being preached on here, by the the propagandists, pumpers, our resident cheeleaders and of course the unforgetable Z173 - Lifesgood - MR. MaTT Mariachi Marching band. And i'll even be quick about it, because it's "fairly" simple and not that much to it........Like the title says......Math for (G)ummies.....8)
Think about the following. If we base ourselves on SU own numbers that were reported, it nascially means that SU is bringing in about ~$8B a year. Aproximately. At first glance your initial reaction to this would be the following......$8B???? Wow those are crazy profits, What's MrMoMo been smoking that he says SU has problems? They just made $8B Big ones. That Mr.MoMo is a total fake, basher shorter (use whatever othercolorful adjective you want to insert in here lol) and what he says is FAKE news". And if you didn't know what to look for, what ALL that means AND have a good understaing of both accounting AND the industry itself, then defintely YES, you would total be lost and say something like this.
Here's the problem or the issue though.....Even with a mindblowing profit of $8B, it's REALLY not anywhere close of being an actual profit that goes into their pockets..........or the coffers the company that is. WHY? Because ALL of the $8B gets used up quickly..... on the spot. You guys got to remember out of that ~$8B about $2,8B goes to divvy payouts. The remainder? Everything else goes to CapEx......just BARELY for what is budgeted. And if you don't know what that figure is, then i strongly suggest you find out quickly or before you do anything in terms of trading.......because MrMoMo knows.........so should YOU.....Also don't forget, they vdo have $25 in debt they need to service and with rates rising quickly, this will be more expensive & difficult to do.
So what does all this mean.........if you're still confused? And if you are indeed STILL confused at this point......then i suggest you either start learning fast and getting some refresher courses in basic finance & accounting 101 or you're in the wrong stock/company.......maybe for some it may be even both. But to save you guys some time. i'll just say this. Assuming that energy prices for Wti/Wcs remain constant throughout the year and into 2024, it means that in order for Suncor to maintain current production levels or increase it slightly, they need to maintain a CERTAIN level of Capex spending. So that means THAT figure is more or less set and non negotiable. And i'm willing to bet that number is close to what is being budgeted currently.
And here's the kicker.......Should energy prices fall, steeply, from current levels, meaning ~$75 WTI and it's corresponding WCS/Bitumen heavy blend deferentials, then something's gotta give. So either Capex will be greatly reduced or the divvy will be cut.....at some point not to disrupt the fluidity of operations or compromise them in any fashion...and there's no agruing this point. WHy? Because there are literally no margins for ANY maneuverability.
I hope SOME of you FINALLY get it ......now.......8)
GLTA