BG Group Share Discussion Threads

[philanderer] 12/11/2012 13:14

From CMC markets

Brent-Currently trading in a range $105/$113,downward bias may be intact while below$113,with potential support @$107.50

[bolador] 12/11/2012 11:51

Bear Man
I think you have answered your own question.
You just have to decide how much weight you put on the sop. You may know for instance that a particular analyst is really good or you may consider that they are all a bunch of rogues, or may be you think that the price of oil and gas is going to plunge and you may be right.
My point all along is that the likelihood of making a profit on the short side once a share has had a big fall like BG is reduced to the point of not being worth the candle. The odd are against you so why bother ?

Anyway good luck, I will just tuck away a few shares.

[the bear man] 12/11/2012 11:20

why then are E&P companies some of the most volatile in the markets? sop must change all the time with oil & gas prices. i presume there were big valuations used for its US shale and Australian LNG assets and these would have been slashed back

[bolador] 12/11/2012 11:02

Bear Man,
No, it is not a "so called sop valuation", it is a sop valuation. It may be over or under but it has method and process. The share price reflects the markets judgement at any one time of company value and is often emotional and sometimes batty but sop s are not. They may be changed in the light of commodity price increase or decline, sales of businesses elsewhere that indicate an adjustment is required,falls or rises in profitability and so on.
To imagine that the sop is adjusted up or down according to the days market priced share price is to get things back to front in a pretty solid way.
BG has never been valued on yield and as such it lacks the support a say five percent yield would bring but that's not the story here. Its the assets, look at the sop and the discount, short is dicey here, why bother ?

[tweeeek] 12/11/2012 10:56

There certainly will be more bad news coming and possibly in the form of further profit warnings, this will be rerated.

[the bear man] 12/11/2012 10:25

your so called sop valuation is always at a premium of such. if the share price rises they lift it, if it falls they cut it. so it has little meaning. but you have to be a bit cautious when the forward dividend yield is only 1.5%

[bolador] 12/11/2012 10:05

A market crash or more bad news might knock BG hard but it is surely not wise to short a blue chip standing at 35% below sop valuation just after the share price has fallen from
GBP1325 to 1044. Why bother, when you could loose a quick two pounds a share on a strong bid rumour versus winning what, a pound ? on a bad market day.
I think these shares hit around GBP8 when we last had a real crash, but any old short will do in those financial hurricane conditions..

[the bear man] 12/11/2012 09:31

according to the company, the brokers had buy recommendations even though the market had been informed of some of the problems. can you really trust them?

[bolador] 12/11/2012 09:25

For the re education of Bear Man

The calculation of the some of the parts valuation is based on two components

The exploration and production part is valued by Goldman S at $82billion.
The downstream business is valued at $22billion.
These two parts work out at GBP1610 per share net.

Other brokers come to similar conclusions.

Now Bear Man will no doubt say that these values are only a matter of opinion which is true up to a point unlike his continuing efforts to say that the net asset value is only 5 or 6 pounds which is simply an attempt to mislead.

Some of the parts values were placed here last week..

[the bear man] 12/11/2012 09:19

or 586p at 1.59

[the bear man] 12/11/2012 09:17

lol. 31.671b divided by 3.4b is 9.32 and thats in dollars !

[newswseller] 12/11/2012 09:16

I can't believe some people are actually trying to deramp a £30billion company, as if your posts could cause any movement on the share price, lol.

[mark10101] 12/11/2012 09:08

I think it is approx £17.23

[the bear man] 12/11/2012 09:06

what is the NAV i think its around £5 or £6

[mark10101] 12/11/2012 08:23

Keep up the good work boys, disappointing so far as to the short side of this, I am not prepared to load up on more (long) until you guys get this to £10. Interesting a lot of fluctuation around the £10.50 which was the low point on the first day of falls. Hope it is not forming a bottom around this level?

[tweeeek] 12/11/2012 08:15

Its a lovely opportunity to short even at these prices.

[the bear man] 11/11/2012 10:14

why would anyone in their right mind buy this now, when there are big cash flow pressures next year? their could be some forced asset sales.

[the bear man] 11/11/2012 10:11

this is the nonsense in the papers - strong record of good dividend? the yield is pathetic


The news came as a shock to investors as the company had a strong record of good dividends and growth.

[the bear man] 11/11/2012 10:10

look at the dividend yield - its only about 1.5%, which compares with 3.7% for the FTSE. and revenues are expected to decline next year

[the bear man] 11/11/2012 10:06

bolador, all asset valuations are opinion. just remember the market was spooked by the low value galp got for its brazilian assets a year ago. and now BG has just bailed out of some of its Australian LNG assets at a low price. imo these brokers TPs are based on very very optimistic asset valuations indeed.