Originally posted by Gindaldan
While I agree POO is oversold, STO is not a blue chip. It’s not investment grade. I, like many others weren’t burnt from this once safe company. Their are other safer options out there for energy exposure.
STO is cheap if POO was 70-80. Expensive at current levels and not a cash cow. It’s taken on further leverage for quadrant which may trigger a third large scale capital raising if POO remains at these levels for a long period of time.
Gindaldan, so you were or weren't burnt by STO? That's the
major rub here from what I can see.
Lots of folks got burnt from the Coates and David Know circus that was Santos. If you want a guarantee buy a toaster not shares. Name me one blue chip (or considered blue chip) on this market that hasn't disappointed. (TLS? AMP? BHP went to 13 and now 33, good money there)
I've been familiar with this outfit since the 90's and have seen many changes good and bad but here we sit with a company that was in the toilet a few years ago based on too much debt, who's got the biggest wang by lets all build over priced LNG plants at the same time and blow way too much money.
Once again I'll say to you
look forwards (sounds like you're living in what happened in the past based on your view and statements) and realise that maybe Quadrant can generate some cash flow rather than debt issuance, it steers STO away from Cooper and CSG in the longer term.
IT PROVIDES GROWTH.
PNG LNG is a cash cow thank you, best you look closely at the figures, it was the real reason Harbor was interested in STO.
Debt paid down in advance hence had the room to make the bid for Quadrant. This stock is more volatile than some but the rewards are bigger as a result if you get on the right side of the trade.
If you want "less risky" in energy, WPL has done a massive capital raise when they didn't need the money, which was smart (most companies do it at the worst possible time as they're forced to) and they're pumping out the gas. Knowing both companies STO is a leaner run organization as WPL has so much wastage internally of resources both equipment and personnel its incredible but with big margins it gets absorbed.
I think based on Mr Gallaghers performance to date I'll back his judgement for now and the healthier state of the business.
If you think oil is staying lower for longer best you stay away form the oilers.
I take a different view based on lack of serious capital expenditure for greenfield developments in the industry over the last few years where that will need to be remedied but as always we'll overshoot to the downside then the upside and that's where you make the money.
For my money at the back end of a bull market cycle commodities will so well.
Best of luck, but to me it sounds like you want stability, I'd recommend BRG or something less volatile than resources.
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