At what price BP?
- Thread starter Swan Noir
- Start date
It depends if you're buying at as an investment or a trade. It's more than a 10% dividend by the way.
BP can lay down 10 billiion without blinking. Remember, their profit last year was more than 20 billion.
Even if they had to give up a couple of year's profits, they're still a bargain at this price. They have billions of barrels in oil reserves which they own. Just selling those alone would pretty much cover the current market cap. So basically, if you buy now, you're buying oil reserves, and then you get that whole BP company thing for free, and the 20 billion dollars a year profit. So, worst case scenario you don't get to collect that profit for a couple of years, who cares?
The above is probably one of the most intelligent things you'll ever read on ET.
I hope the price crashes so some really dumb people can laugh at me, and prove that they can't even understand such a simple idea.
If you think the stock is a bargain at a 10% divy, just wait until it gets to a 100% divy. That divy can be terminated by a PR tomorrow, and then what happens to the stock price? As far as BP's earning power goes, how much does it cost to clean-up the gulf of spilled oil, meet all of the environmental regulations, and pay all the states along the gulf for lost revenue from the adverse impacts to tourism and employment?
I show BP's 10-year low at 33.70. Today it nearly broke through that level. If it breaks through, then there's no definable support. BP's fundamentals aren't much to write home about either (quick ratio of .75x) .
When a stock has no definable support, and nothing but bad news on the horizon, I don't see it as a long term income play with upside potential.
DRYS broke down one long term support level after another in 2008 (their fundamentals were also dismal), broke it's all-time low of 8.50 and traded below 3.00 less than a year after trading well above 100.00. It's not much above 3.00 now, more than another year later and despite an "improving" economy.
I know its only for a trade but with the news flow out of this company by the seconds makes for a very risky trade, there is still debate on how much oil is flowing even with the so called fix they did just this past weekend. It still looks really bad for BP going forward. This is the worst oil spill in history!!!!
This stock is a sell in my opinion, I think single digits are a real possibility moving forward, I even think they could file bankruptcy if this leak doesn't stop by the end of 2010.
Interesting reply and I think there is some truth to what your saying. I am not actually so mad about the trade or even the loss. It is the lack of leadership on the BP team.
Even on days that I am flat I shake my head and wonder when they are going to pull their head out. Its as if the management is in slow motion. It reminds me of the movie good morning Vietnam with Robbin williams. Williams plays a song on a slower speed than it should be and makes some funny remark that it sounds just right if your hung over or something like that. Watching BP work is like listening to a song on the wrong speed (this goes back before CDs for those that dont understand ....LOL)
