Anyone like the energy sector?

resourceful_man said:

SGL looks to have bottomed.
Sales look much better, but I'm just watching for the time being and see if the chart can hold.
One to watch in the future but still holds some risk.

Click to expand...

I've been trading these down to the trough (some losses on the way) and now on the way up (some nice profits starting to balance those losses).. if they continue northwards my ongoing SGL account will be looking decidedly healthy.

I don't see relatively high risks with this stock going forward, now that they have purged the fat cats (including that money-grabbing CEO Butcher) and are streamlining their organisation with some serious executive belt tightening. Added to which I expect they will appoint a decent CEO in the near future which should see the shares bounce.

On top of that, they have paid out the AGL loan in full and are rapidly moving towards cash flow positive earnings in the next quarter with plenty more well income to follow over the next year. Energy stocks such as SGL, BPT, ORG etc and utilities like ENV, DUE, APA, AGL etc form my main trading platform (most are relatively safe in times of economic crisis - as seen in the last market pullback in March-April compared to consumer discretionary or finance stocks) and they have enough day to day or week to week volatility for me to range trade in slow periods. Added to which most utilities and a few energy stocks pay some reasonable dividends which can help if you get stuck with them for a bit...

That's my theory anyhoo!

;o)

AJ

I've bought into the energy sector since Nov last year and I'm very pleased with the results. With such a demand for energy the stock prices will always go one way(within reason)

Good announcement for SGL today. $42 million from AGL as part of finalisation of JV has been paid to SGL. That should burn a big hole in any of SGL's outstanding debts and turn the current financial assets/liabilities ratio on its head.

SGL should be able to produce more stable earnings from here on with development risks (as well as profits) shared by AGL. There is also a hint of a much more earnings positive future in the Chairman's address to shareholders - he mentions the re-organised company under the banner "Wollemi Energy" would be looking at other forms of energy provision as well as expanding the gas production (eg power generation).

I HOLD.

Cheers,

AJ