ALD - Ampol Limited

[piggybank]

The company did a presentation the other day as part of their International Road Show.

http://www.stocknessmonster.com/news-item?S=CTX&E=ASX&N=823868

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[Ves]

Hmmm... I still don't think this is wildly expensive at these prices (at around 11-12x EBIT with fairly dependable earnings). I haven't added since my last post. Update today starting really confirm the investment thesis that McLovin first mentioned.

EDIT: Net debt of $650m, a reduction of around $100m this year, also provides evidence of the cash generation abilities of the underlying business, despite being in the middle of a major transformation capital project!!!

 

[VSntchr]

Kaboom! 50% of the company on-sale. Lots of supply = the market has punished it down ~10% for the day.

Although it may not be all bad, with the foreign holding gone there is potential for ASX50 index inclusion and the possibility for capital management has increased now that the release of franking credits becomes more appropriate. In a yield appreciative market this should bode well in the medium term for Caltex.

Operationally, the company states that it's business as normal - with Chevron keeping the supply agreement in force.

Had a read through the thread and saw a few first class ASF business analysts discussing this in 2013 - the chart shows it's been a rewarding exercise for you guys!

 

[skc]

Kaboom! 50% of the company on-sale. Lots of supply = the market has punished it down ~10% for the day.

50% of the company SOLD. Bookbuild was done over the weekend... the BIGGEST one in ASX history no less.

I can never understand why a major shareholder's block trade has so much impact, especically when there are extenuating circumstances which are pretty well known. In this case, Chevon needs to hunker down in the low oil price environment... yet somehow there are enough lemmings out there to sell the stock in unison.

Although it may not be all bad, with the foreign holding gone there is potential for ASX50 index inclusion and the possibility for capital management has increased now that the release of franking credits becomes more appropriate. In a yield appreciative market this should bode well in the medium term for Caltex.

I am surprised that it fell that much... I thought it would hold $35 given the benefits as you've flagged. Looking for a bounce trade over the next few sessions.

 

[notting]

Starting to look like it wants to lead the charge!
All this refining of cheap oil gonna be helping some.

The OPEC oil cartel will be forced to call an emergency meeting within weeks to stabilise the market if crude prices fail to rebound after crashing to eight-year lows of $US35 a barrel, two member states have warned, the UK Telegraph's Ambrose Evans-Pritchard says:

Emmanuel Kachikwu, Nigeria's oil minister and OPEC president until last week, said the cartel was still hoping the oil market would recover by February as low prices squeeze out excess production from US shale, Russia and the North Sea. But nerves are beginning to fray.

"If it doesn't, then obviously we're in for a very urgent meeting," he said. Indonesia has issued similar warnings over recent days, suggesting the OPEC majority may try to force a meeting if Saudi Arabia's strategy of flooding the market creates a deeper crisis.

 

[peter2]

CTX: An interesting chart right now, because there's a attractive setup for a longer term trader.

Daily chart: First thing I do is draw a line across 31.00. It's a very clear resistance line. Then I notice the HL (higher low) formation. These two things make the chart interesting for me as a BO trader.

The logical place for an iSL is below the HL. The size of the risk is (31.00 - 28.50 = 2.50) too large for a short term method. It's OK for a medium term TP using weekly charts though.

Weekly chart: Huge price swing from 17 to 38 dominates the chart. Since then (~2.5yrs) price has been trading sideways. This corrective move looks about done (abc'ish down to 50% level), so the potential for another impulsive move up is there and we've got a low risk setup for a weekly trader. The old highs near 38 provide an acceptable RR.

I'd need to have a fundamental catalyst to help the trade go higher (impulsively). I'm aware that Caltex has modified their business over the past two years and perhaps this is why the price has traded sideways (and nobody has posted in this thread for 2.5yrs also). I don't know if Caltex can grow their business or significantly improve their margin to boost their share price higher. It could be just another "value" business but not a "growth" one.

The price chart is poised . . .

 

[bigdog]

The Motley Fool reports today
https://www.fool.com.au/2018/05/15/leading-brokers-name-3-asx-shares-to-sell-today-8/

Three that caught my eye are listed below. Here’s why they are tipped as sells:

Caltex Australia Limited (ASX: CTX)

According to a note out of Morgan Stanley, it has retained its underweight rating and $26.00 price target on the fuel supplier’s shares. The broker believes that investors ought to be cautious amid speculation that Puma Energy might be interested in acquiring the petrol stations owned by Woolworths Group Ltd (ASX: WOW). Its analysts suspect that it would be unlikely that Caltex would be contracted by Puma to supply its fuel, putting future earnings at risk. I think that Morgan Stanley makes a great point and would suggest investors approach Caltex with caution.

 

[greggles]

According to a note out of Morgan Stanley, it has retained its underweight rating and $26.00 price target on the fuel supplier’s shares. The broker believes that investors ought to be cautious amid speculation that Puma Energy might be interested in acquiring the petrol stations owned by Woolworths Group Ltd (ASX: WOW). Its analysts suspect that it would be unlikely that Caltex would be contracted by Puma to supply its fuel, putting future earnings at risk. I think that Morgan Stanley makes a great point and would suggest investors approach Caltex with caution.

Caltex is definitely heading lower at a fairly rapid rate. As for the target price of $26, it hasn't seen that level since August 2014, and there doesn't appear to be any support there so it may in fact head lower than that if it does actually get down that far.

Definitely one to stay out of for now until the big picture becomes clearer.

 

[bigdog]

ASX announcement today
26/11/2019 10:00:54 AM Receipt of Non-Binding Indicative Conditional Proposal (uploaded below)

Share price up 11.9% at 11:26 am

Caltex confirmed it had received an unsolicited, conditional, confidential, non-binding and indicative proposal from Canadian convenience store multinational Alimentation Couche-Tard to acquire all of its shares.

The indicative cash offer price is $34.50 per share while the Caltex share price closed yesterday at $29.79 .

Don't hold

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[bigdog]

On November 26 Caltex revealed that it had received an unsolicited, conditional, confidential, non-binding and indicative proposal from Alimentation Couche-Tard.

Alimentation Couche-Tard offered to acquire Caltex by way of scheme of arrangement at an indicative cash price of $34.50 per share less any dividends.

This morning Caltex announced that its board has concluded that the proposal undervalues the company and does not represent compelling value for Caltex’s shareholders.

Update on the Proposal from Alimentation Couche-Tard
CALTEX AUSTRALIA LIMITED CTX 9:20 03-Dec-19

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[Smurf1976]

I see from media reports that the Australian Caltex service stations, all of them, are to be re-branded from Caltex to Ampol.

Whilst the Ampol name will be very familiar to Australians over the age of ~40, it's an unfamiliar brand to the younger half of the population and to the not insignificant number of immigrants who've arrived in Australia since then.

So I'm thinking that it's not a positive. Petrol is a commodity product certainly but the brand name must have some value surely? They're switching to what for probably half of potential customers is an unknown name so I can't see too much benefit from that. No choice though since Chevron has apparently decided to not renew the licence to use the Caltex name.

 

[galumay]

Hard to know how it will play out, seems likely the Caltex name will grace the Puma servos as Chevron has bought them. Not sure brand plays much part with fuel, convenience and price is probably the big driver. Long term savings for current Caltex in licence fees, but a big upfront cost for rebranding.

The more sensible option would be for Chevron to continue to licence the Caltex name and retain the Puma name in Australia, they would keep licence fees, have no rebrand cost, and Caltex would also have no rebrand cost. Win win.

 

[qldfrog]

By pure system refining luck or bad luck, i sold today at the open with minimal loss.i agree that the name is not that important

 

[System]

On May 19th, 2020, Caltex Australia Limited (CTX) changed its name and ASX code to Ampol Limited (ALD).

 

[jbocker]

Whilst the Ampol name will be very familiar to Australians over the age of ~40, it's an unfamiliar brand to the younger half of the population and to the not insignificant number of immigrants who've arrived in Australia since then.

Supply extra cheap fuel for a while will help with quick brand recognition.
On history I remember Mobil stations and the scarce Golden Fleece. Crank handle start ups. But NO not horse and cart. When I started driving a carton of beer and a larger tank of petrol cost about the same, $20 and was all stocked up with a bit of change for parking..

 

[sptrawler]

Supply extra cheap fuel for a while will help with quick brand recognition.
On history I remember Mobil stations and the scarce Golden Fleece. Crank handle start ups. But NO not horse and cart. When I started driving a carton of beer and a larger tank of petrol cost about the same, $20 and was all stocked up with a bit of change for parking..

Those were the days, petrol 50c a gallon, beer 80c a jug and wages $22/week.
Myself and a mate used to put $2 of fuel in the HG 253, take $2 for drinks and have a great night out in Kal (beer, women and fights the good old days in the wild west).

 

[jbocker]

Those were the days, petrol 50c a gallon, beer 80c a jug and wages $22/week.
Myself and a mate used to put $2 of fuel in the HG 253, take $2 for drinks and have a great night out in Kal (beer, women and fights the good old days in the wild west).

You would have been baptised with Hannans Lager. I had a HK, it nearly ended up with a different colour for every panel, including the roof. The coppers loved pulling me over to have a chat.

 

[Dona Ferentes]

Key points
• Ampol welcomes the Federal Government’s proposed support for Australian refineries, which provides a variable support payment of up to $108m pa for Lytton operations during periods of low refining margins
• The package also provides for a funding grant of up to $125 million from the Federal government to undertake infrastructure upgrades to produce ultra-low sulfur petrol
• Ampol intends to continue refining at Lytton until at least mid 2027, in accord with the package requirements, provided that the legislation is enacted and government support initiatives are finalised as proposed
• With ongoing refining operations, Ampol will realise benefits afforded to Australian refiners under proposed minimum stock holding obligations, including lower holding obligations, reducing working capital requirements and avoidance of costs on incremental storage
• Ampol’s decision maximises shareholder value, and enables progress towards alternative uses for this strategic site, while preserving and developing manufacturing skills that will be critical for success in the energy transition
• Support during periods of low margins improves the quality of Lytton’s earnings profile by significantly reducing earnings volatility and earnings downside risk, which should result in a higher earnings outcome on average
• Reduced volatility will improve earnings quality, lower average cost of capital, and enable Ampol to increase its target leverage range to 2.0x – 2.5x Adj. Net Debt / EBITDA, in turn supporting incremental growth and/or shareholder returns
• The Federal Government recognises that fuel security and energy transition are linked, and has confirmed an intention to work in partnership with Ampol to leverage its privileged assets, supply chain expertise and customer positions in shaping the energy transition and developing future energy solutions for Australian businesses

 

[frugal.rock]

I had a HK, it nearly ended up with a different colour for every panel, including the roof. The coppers loved pulling me over to have a chat.

Myself and a mate used to put $2 of fuel in the HG 253, take $2 for drinks and have a great night out in Kal

Just to round out the Holden model series...,
Cops loved pulling me over in my
HT Premier, 186 with a 2 speed power glide. White (whale) with awesome factory black interior.
I remember doing a big handbrake 180° broadslide into a parking spot on the other side of the road at the local shops.
Better days for sure.

 

[Dona Ferentes]

Ampol has secured an Energy Retailer licence; and at least it has the Brand Power:

Ampol has made its entry into electricity supply, opening its first AmpCharge electric vehicle charging site in the inner-city Sydney suburb of Alexandria, with a pilot offer to household customers in the wings.

The Alexandria AmpCharge site, at the Ampol Woolworths MetroGo site, is the first of 120 electric vehicle fast-charging sites to be delivered at Ampol forecourts across Australia by December 2023.