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Strategies & Market Trends : Value Investing

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To: FIFO_kid2 who wrote (75645)	5/16/2024 10:03:23 AM
From: Harshu Vyas	Read Replies (2) of 78918

I've noticed the high portfolio turnover but energy picks have been frequent. I think VTLE has appeared a few times now. I'm just wondering why BP. What's better about BP compared to US producers? As a UK citizen, I've often ruled out both Shell and BP because they're subject to insane amounts of regulatory scrutiny. Maybe that's exactly why they're worth looking a little closer at. No-one in the UK wants to snap them up. For example at the time I looked natural gas is priced at $7.30 per MMBTU in the UK where it is only $2.41 in the USA. A gas producer in the UK would realize much more cash flow with the tax than one operating in the USA. Great point! - and will have to run the numbers. Will dig through the annual report. I'm sure they would have put it somewhere - if not a table, then in words. If they haven't put it in the report, maybe they're trying to hide it and that's because it's good news for shareholders? As I say, my largest concern is the politicians already know about it. UK have a general election coming up this year - both parties are likely going to target energy companies to make the average person feel better about their higher energy bills. At the minute, we have Conservatives in power and they've made it very easy for Labour to come in and make the windfall more harsh. Perhaps it's a risk I'm overestimating? Perhaps, BP's strength is all of the renewable stuff they're doing? There are some tax benefits to it, but that alone doesn't make it investable. Valuation's more than reasonable and it often comes up on my screens. What was that about Graham's number yesterday? Well, this is 1.5x book and under 12x earnings... Quickly read through the earnings transcript this morning. Management are going to buy back stock aggressively and continue with the dividend. More returns driven and less renewables with the new CEO. I don't know whether that's great for the longevity of BP, though. Thanks for your insight. I think you've pointed me in the right direction. Even if Burry's already out, it's one I'd like to try and get my head around.

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