Sankey Research in Time Square yesterday Calls APA and CPE deal expensive for APA

[Cliff_N]

https://www.youtube.com/watch?v=qj1DoEIszbY

From Paul Sankey Research 15 hours ago, he posted and mentioned APA as bad management, no faith in getting it done, and an expensive deal with CPE. PR is his top pick for 2024 and also likes Fang. Labels APA management as terrible as BP.

Negative on the management of APA and very complimentary of the PR and FANG management.

Never heard of "Sankey." This was just posted on the CPE site.

[dan_s]

My "Dream Merger" is PR merging into FANG. It would create a company the size of PXD with market-cap of $37 billion, which compares to the $60 billion that Exxon is paying for PXD. IMO FANG+PR would be more attractive.

PR remains one of my Top Picks for 2024.

Today I hope to update the forecast models for CPG and PR. I still need to update forecasts for RRC, SBOW and SM.

BTW adding another year to my forecast models is one of my most time consuming tasks each year in January.

[dan_s]

FYI

Paul Sankey, the widely-followed oil analyst who was first to call for negative oil prices when COVID began impacting world markets, started his own research firm Sankey Research in the depths of COVID, June 2020. An independent research company, not a broker-dealer, Sankey’s independence has allowed him free voice, unconstrained by typical Wall St limitations, such as on stocks which he does not cover, on government policy, and notably on China.

Among other recognized calls, Sankey in the past tagged premium oil company EOG “The Apple of Oil”, ExxonMobil “The Big Unit”, pushed “The Diamond Age of Refining” over the past decade for US refiners, and has called for “The Renaissance” in US Exploration and Production in terms of companies reducing growth, reducing debt, and increasing cash return to shareholders. He has also styled himself an “analyst as activist” and heavily covered controversies such as Chevron vs Oxy for Anadarko, and most recently the Engine #1 battle for ExxonMobil’s board. His note “Chevron for ExxonMobil” at Sankey Research was subsequently shown by the WSJ to be written in fact, just when Chevron and ExxonMobil considered a merger in 2020. His CNBC pair trades have become widely followed, starting with “Long XOM Short AAPL” totally against consensus in August 2020, and most recently in early January 2022 “Long Marathon Petrolelum, Short Rivian” that has returned +50% vs the S&P500 -10% since he made it.

Sankey started covering oil in 1990 out of Manchester University, joining the IEA in Paris, with subsequent stints at Wood Mackenzie, Deutsche Bank, Wolfe Research, and most recently Mizuho. He has ranked consistently highly or #1 in many investor surveys since his arrival on Wall Street in 2004; and was ranked #1 ii for three straight years at bulge bracket DB before joining boutique Wolfe Research as their 60th employee. He was also the 60th employee at Wood Mackenzie. Both companies have subsequently grown exponentially since those formative days.

Website: https://sankeyresearch.com/macro/oil-gas/

[Fraser921]

He is very good.

Btw, he is negative on CRK. Despite the alternative narrative that they are making money, break even is north of 3.50

Speaking of CRK , new all time low achieved today with a 7 dollar handle being achieved!

I warned you to stay away from this one when it was 19 and they pulled a fast one on JJ preferred conversation getting paid twice.

History of crap hedges when prices were strong and not enough hedges when prices are weak. Outspending cash flow

Yes things can and could get better but your investing on hope not current conditions

Btw, I posted the Sankey interview yesterday. He also mentioned a paired trade, buy product tankers and short EV’s. I’ve mentioned these names numerous times

They have a fcf yield 35-50%

Have a nice day!

[Fraser921]

Sankey was on CNBC Fast Money last night

video here

https://youtu.be/yT6eaqjL6Ko?si=p3G-o6AfaQc3pC8Q

then after that interview

he did one in Times square. he does these weekly

https://www.youtube.com/watch?v=qj1DoEIszbY

Other points;

- Oil supply ample.
- Large E & p planning on $ 60
- Part of problem over production, Saudis might have to flush market
- Acquisition are paid with stock and low premiums then price go down (VTLE) dont care as insiders driven by option vesting
Another negative for the sector

[sl6886]

Damn, there's just no relief in this sector.

Remind me again what tanker companies you like and why?

[aja57]

sl6886,

I’d check out LPG, TRMD and INSW for growth and income, STNG and GASS for growth. My favorite is INSW which has an ROIC of 26%, FCF yield of 17% and price to economic book value of 0.3 meaning at zero growth the value of INSW is around 150 dollars/share. It pays a 9.5% dividend. Another shipper is GSL which leases container ships.Its ROIC is 15%, FCF 18% and price to economic book value of 0.2 meaning the company at zero growth is worth about 100//share. TRMD is a refined oil product tanker company that’s trading near book value that pays 17% dividend. LPG is a liquified petroleum gas shipper that has had a great run since post Covid, pays a special dividend that equates to 9.68%. STNG is another refined oil tanker that has been on a tear since July 2023. It pays a small dividend but seems to be a Wall Street favorite. GASS is what I would call the “baby LPG”. Great growth opportunity and trading at 50% book value. I’m sure Fraser has got others that might be more compelling.

[Cliff_N]

Dan, Fraser and others thanks for the background on Sankey; aja57 thanks much on the tank company recommendations. 17% dividend on TRMD looks very attractive! Note the scores on three stocks recommended from IBD, LPG is posting a 99 composite ratings. All stocks are at 52 week highs, if not five year highs: