don't recall anything like this since 08/09. I went all cash except vnr on the 3rd and was kicking myself for caving, but sure feel different today. am thinking about buying more vnr, but close today may disappoint--waiting to see.
you'd think oil had dropped to 50.
jim
sell 0ff is unmerciful
Re: sell 0ff is unmerciful
I sold out today except for OAS, LGCY and HCLP. I'm kicking myself for not following the technicals. So that may be the bottom.
Re: sell 0ff is unmerciful
With the S&P 500 (SPX) down three weeks in a row for the first time since January and the Russell 2000 (RUT) down six weeks in a row for the first time in over nine years, things are looking rather bleak. At the same time, from the third week of September till the end of October is historically a pullback, so this fits right in with seasonality. In fact, some more lower prices in the near-term wouldn’t be that abnormal before the historically bullish end-of-year period.
The next major mover for stocks is going to 3Q earnings season. As you might recall, 2Q expectations were for about +6% year-over-year growth and it actually came in at over +10% for the first time in over three years.
According to Factset, 3Q expectations are +4.5% over last year. This number was +9% at the end of June, so it has been cut in half. If we’ve seen anything the past three years, it is analysts panic ahead of earnings season, set the bar very low, and good earnings spark a strong rally. I wouldn’t be shocked if it happened once again.
Read: http://finance.yahoo.com/tumblr/photose ... 58484.html
Our portfolio companies are going to report STRONG Q3 results. - Dan
The next major mover for stocks is going to 3Q earnings season. As you might recall, 2Q expectations were for about +6% year-over-year growth and it actually came in at over +10% for the first time in over three years.
According to Factset, 3Q expectations are +4.5% over last year. This number was +9% at the end of June, so it has been cut in half. If we’ve seen anything the past three years, it is analysts panic ahead of earnings season, set the bar very low, and good earnings spark a strong rally. I wouldn’t be shocked if it happened once again.
Read: http://finance.yahoo.com/tumblr/photose ... 58484.html
Our portfolio companies are going to report STRONG Q3 results. - Dan
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: sell 0ff is unmerciful
From EnerCom MLP Update:
"With crude oil prices dropping to $86 per barrel this week, energy stocks have been decimated and MLPs have been subject to indiscriminant selling. “At this point we still remain a bit too concerned over the potential for significant further losses to step into the sector in a material way. Given that the primary driver of this sell-off appears to be the continued decline in crude prices, their stabilization could provide a potential leading indicator to resuming a more aggressive stance on the sector,” writes RBC Capital Markets Analyst John Ragozzino. Many energy master limited partnerships, especially pipelines, are billed as fee-taking enterprises that are less correlated to commodities prices than other energy names. But more MLPs with exposure to oil-and-gas price volatility have entered the fray, from refiners to exploration companies, and some MLP investors aren’t keen on a buy-and-hold strategy."
If we can just get Brent to stabilize near the current price ($88-$89), I believe the bargain hunters will swoop in. There are a lot of fund managers waiting and watching carefully. Timing the bottom is tricky business, because once the "herd" begins to move the dust behind them can get thick. - Dan
"With crude oil prices dropping to $86 per barrel this week, energy stocks have been decimated and MLPs have been subject to indiscriminant selling. “At this point we still remain a bit too concerned over the potential for significant further losses to step into the sector in a material way. Given that the primary driver of this sell-off appears to be the continued decline in crude prices, their stabilization could provide a potential leading indicator to resuming a more aggressive stance on the sector,” writes RBC Capital Markets Analyst John Ragozzino. Many energy master limited partnerships, especially pipelines, are billed as fee-taking enterprises that are less correlated to commodities prices than other energy names. But more MLPs with exposure to oil-and-gas price volatility have entered the fray, from refiners to exploration companies, and some MLP investors aren’t keen on a buy-and-hold strategy."
If we can just get Brent to stabilize near the current price ($88-$89), I believe the bargain hunters will swoop in. There are a lot of fund managers waiting and watching carefully. Timing the bottom is tricky business, because once the "herd" begins to move the dust behind them can get thick. - Dan
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: sell 0ff is unmerciful
any predictions if any of the better E&Ps or MLPs will be snatched up by some sovereign wealth funds soon if prices continue to dive? this definitely reminds me of the 2008 market crash, except we can't blame Lehman Bros. for this one.
Re: sell 0ff is unmerciful
My hope is that today washed out most of the remaining weak hands. IMO all of the Sweet 16 are grossly oversold, as you can see if you take the time to look closely at my updated forecasts. Those with strong balance sheets should go up first. XEC has a very strong balance sheet and they are still going to generate very strong ROR in their two primary focus areas. EOG, CLR, WLL and DVN will look attractive to large funds.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: sell 0ff is unmerciful
too early to call, but I do see signs of trying to bottom. up, down, now trying to go up again. time will tell.
Re: sell 0ff is unmerciful
Definitely nice to see a lot of green on the portfolios today. Yesterday just "felt like" a wash out day to me, that ran off most of the remaining weak hands. Some carryover selling this morning, but this rally is on some heavy volume.
WTI down big again this morning as Brent takes another $2/bbl hit. Last two hours of trading have seen WTI clawing back. A close near $85/bbl would be very encouraging to me.
Even if WTI drifts down to $80, the upstream companies are oversold. For most of the Sweet 16, I have to take oil down to $60 to get valuations like today's share prices. That is because they all have a lot of production hedged at higher prices.
BBEP dipped to $13.70 making the yield 15%. That is crazy for a company of this size and quality. They have over 70% of their production hedged though end of 2015.
WTI down big again this morning as Brent takes another $2/bbl hit. Last two hours of trading have seen WTI clawing back. A close near $85/bbl would be very encouraging to me.
Even if WTI drifts down to $80, the upstream companies are oversold. For most of the Sweet 16, I have to take oil down to $60 to get valuations like today's share prices. That is because they all have a lot of production hedged at higher prices.
BBEP dipped to $13.70 making the yield 15%. That is crazy for a company of this size and quality. They have over 70% of their production hedged though end of 2015.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: sell 0ff is unmerciful
I took a gamble and used what cash I have on the sidelines and started buying BBEP, MEMP, LINE, VNR and BTE on this morning's washout (feels like a washout to me). What a selloff to get yields on these upstream MLPs between 12% and 15% at these levels with most of their production hedged for some time. BTE feels like a gift to me at this level because it's down to 3 year lows here on the charts, yielding ~ 9% here. Good luck to all of EPG investors, hang in there! 