SEA - Sundance Energy Australia

[Parse]

With OPEC only approving moderate gains to oil output and higher then expected crude draws in the northern hemisphere, the price of oil is looking bullish. WTI is currently (at time of writing) over $73 a barrel and the northern summer is when the highest usage occurs. Sundance don't appear to be doing anything wrong in their latest operational update (link below) and the share price seems to have consolidated recently. Share consolidation has been held back until the end of this year giving the SEA share price a chance to become bullish just like the POO currently stands.

SEA SP at time of writing: 7.3c

https://www.asx.com.au/asxpdf/20180615/pdf/43vssdjw3qpkbr.pdf

 

[Sdajii]

SEA has had a fairly flat month. I'm hoping the consolidation in July and continued strength in oil price will see the next step up in price in August. The main thing I think the market is waiting for is actual production, which will take time, but if it goes as planned (which admittedly is an if) and the price of oil doesn't totally tank, the share price should be multiples of the current figure in 6-12 months. Several brokers are still sitting with multibagger price targets, so I'm holding and watching with optimism.

 

[Parse]

The oil price is down, the market is down, sentiment is down and SEA is down. Somewhere near the vicinity of 5c a share. The Saudi's are trying to put the brakes on oil output but Russia aren't quite as willing to play the game this time. Still, it's quite possible most factors might come together and as a by product, lift the share price of Sundance in December.

Sundance is still undervalued, Morningstar reckon it's currently worth 7.2c per share, so it shouldn't take a lot of changes to the metrics to see it's price increase. My pick for December.

 

[Ann]

I find stocks which consolidate are much like the bushrangers of old, only without guns or risk of punishment. I have been robbed by a similar situation on CGA which I will go into under the correct thread.

I am expecting this stock to slowly fall back to a much lower price level, anyone who bought into this stock prior to the consolidation only has one tenth the holding now. It is likely they won't even end up with a marketable parcel to sell eventually. I find this whole pitiful scenario so depressing I can't even muster the energy to make a pun about the ASX code.

Notice on the PVI how you can see people bailing out of the stock on November 20. Then the ASX announcement on December 11 and on the 13 it happened. I am going to start a folder on my charts headed R.Souls. No I am not meaning assholes, I mean Rotting Souls because that is how it makes me feel about those people who decided to in my opinion, swindle their shareholders. I am going to track them and revisit them and make sure people remember what they do to their shareholders.

Here is a list of the current directors and executives who I shall watch out for on other stocks. I think they may have done it before as they said they wanted to bring this stock into line with their other stocks, or words to that effect.

Directors & Executives (current)
NAME TITLE DATE OF APPT*
Michael Hannell Non Exec Chairman 10/03/2006
Eric McCrady Managing Director, CEO 29/11/2011
Cathy Anderson CFO 11/01/2012
Damien Hannes Independent Director 28/08/2009
Neville Martin Independent Director 18/05/2011
Weldon Holcombe Independent Director 19/12/2012
Thomas Mitchell Director
*Date of first appointment, title may have changed.

 

[Sdajii]

I think you're being a little harsh on SEA, and completely nonsensical in terms of the consolidation.

There's no point talking too much about the consolidation because it's really not that big a deal, but it has virtually no bearing on holdings becoming unmarketable. On paper there is no difference and the psychological effect perhaps has a (very small) negative impact in the short term and a (small) positive impact in the medium to long term. But again, extremely little impact overall.

The main reason SEA has fared poorly recently is the declining POO. SEA was on a lovely uptrend while oil was trending up, and not surprisingly it has also followed oil down. As you know from my posts in the oil price discussion thread I am very bullish on oil over the next 6 months, and I think SEA will be looking great by mid 2019. Bashing the directors at this point seems quite inappropriate.

 

[tech/a]

Sorry sdajii
I’m with Ann on this one!

 

[Ann]

Sorry sdajii
I’m with Ann on this one!

Tech/a, I have looked into this consolidation stuff a bit further now, it is quite hair-raising. When it happened to me I just went meh, suck it up, ten grand won't kill me. Then I thought recently it may have been a tricky dick kind of move as in buy some rights with options attached and trade the options to get your money back. Can't see anything. I see TEN did a consolidation and then the price fell to nothing and Ten Network Holdings Limited (TNHL) was taken over by CBS International Television Australia Pty Ltd (CBS Australia) on 10 November 2017. Sticking it to mountains of mug punters who all got done like dinners. I think I will start a little project on ASF about Consolidations and see what I can see.

 

[tech/a]

Read the PEN
thread perfect for your case !

 

[Ann]

This is a stock I would suggest everyone avoid like the plague, you run an excellent chance of losing all your money through a future stock Consolidation. It is a Rotting Souls stock.

 

[Sdajii]

Sorry sdajii
I’m with Ann on this one!

I'd love to hear your thoughts about SEA in the short, mid and long term. I assume you being you, you're purely looking at the technicals and ignoring the fundamentals? Given the nature of the company, I think the fundamentals are going to override the technicals within a few months.

Interested in reading your thoughts, whatever they are.

 

[Parse]

This is a stock I would suggest everyone avoid like the plague, you run an excellent chance of losing all your money through a future stock Consolidation. It is a Rotting Souls stock.

Hey Ann, they just did a stock consolidation. Does this mean you think they are going to have another consolidation? And if so, what time frame are you thinking?

 

[tech/a]

Sdajii

I think the weekly chart sums it up very well visually.
This basing for the last 2 years is both distribution and accumulation.
But the ranging tells me that there is impatience,very few hold on
for years with decaying return.

If you firmly believe that "Fundamentals will kick in in the coming months"
Then you will clearly see that in the chart. High volume and gaps to the up side.

But sitting here waiting is not a good trading strategy.

 

[Ann]

Hey Ann, they just did a stock consolidation. Does this mean you think they are going to have another consolidation? And if so, what time frame are you thinking?

G'day Parse, no I doubt it not immediately, they may do a small one a bit later if they need to mop up a few more investors left behind, cleanse their books so there are no angry stock holders invited to their next AGM, you know, those pesky old farts who want the free coffee and bikies at the beginning of the meeting and who have just been robbed of their few measly superannuation dollars.

Check out what the ASX SEA chart looks like at the moment, screaming there is a big rise in SEA levels of 614.29% BULLSH!T ASX! I have a screenshot for future reference. Friday's close was 0.295, it is currently trading at 0.30, this is no 614.29% rise. I hope people sucked into this because of the ASX can get some future redress.

Wealth Warning: This company does stock Consolidations which may lose you your entire investment.

 

[Darc Knight]

G'day Parse, no I doubt it not immediately, they may do a small one a bit later if they need to mop up a few more investors left behind, cleanse their books so there are no angry stock holders invited to their next AGM, you know, those pesky old farts who want the free coffee and bikies at the beginning of the meeting and who have just been robbed of their few measly superannuation dollars.

Check out what the ASX SEA chart looks like at the moment, screaming there is a big rise in SEA levels of 614.29% BULLSH!T ASX! I have a screenshot for future reference. Friday's close was 0.295, it is currently trading at 0.30, this is no 614.29% rise. I hope people sucked into this because of the ASX can get some future redress.

Wealth Warning: This company does stock Consolidations which may lose you your entire investment.

ASX has updated the % but Google still brings it up as "614% (ASX)"

https://www.google.com.au/search?so...358.3-1......0....1j2.......3..41.n0OeC8sWkKk

 

[Sdajii]

Sdajii

I think the weekly chart sums it up very well visually.
This basing for the last 2 years is both distribution and accumulation.
But the ranging tells me that there is impatience,very few hold on
for years with decaying return.

If you firmly believe that "Fundamentals will kick in in the coming months"
Then you will clearly see that in the chart. High volume and gaps to the up side.

But sitting here waiting is not a good trading strategy.

View attachment 90902

Thanks for your thoughts. I agree, you wouldn't buy or hold this based on the technicals, but I do believe in the fundamentals. If the technicals pull the price down before the fundamentals do their thing (the big change being oil price), there should be a good opportunity here. How low would you expect SEA to go over the next 1-3 months assuming oil doesn't improve in that time? Any idea on timeframes?

 

[Parse]

I must admit I'm more a fundamentalist then a technical analysis person. SEA has been hit hard with the state of the stock market and the crash in oil prices. OPEC+ has tried to stem the bleeding of the POO, but it hasn't worked. The rumour mill is even suggesting that OPEC are considering an emergency meeting to further cut production.

Still, January looks brighter as that's when the OPEC+ cuts start and we might see less oil on the market from OPEC+. Given that the USA supply is at a high one might think that this reduction from OPEC as insignificant, but there are also concerns that the shale producers in the USA aren't going to do real good with prices lower then $50. However SEA does have a lot of hedges up around the $60 mark which should keep it buoyant.

Thus I am thinking oil isn't going to stay at these levels and will rise, taking SEA's share price with it. As such I am tipping it again in the January comp, Sdajii will most probably want the same pick!

 

[Sdajii]

I chose SEA as my top pick for the 2019 competition. My reasons are pretty simple and largely based on my very bullish outlook on oil. I strongly believe that within the first half of 2019 oil will hit $100 per barrel. That's another story from SEA, but assuming that external factor to be true it's very easy to see why SEA will perform extremely well. The technicals do currently look bad, but that will mean nothing if we have oil at more than double what it is now. Well, if anything, perhaps because it is going against the technicals so heavily, the previously negative technical situation may cause an extra boost thanks to the contrast.

Parse: Yes, I was going to choose SEA for January and then saw you'd already taken it. Being bullish on oil I chose another oiler instead. I'm not entirely sure how oil will go in January. I am guessing it will start to pick up and continue on from there, but it's a little bit difficult to predict around now, which I see as the turning point. It may take off in January or flutter around at these levels for a while. Best of luck with SEA in January, I will be very, very pleased if you win, even if I don't get the little extra cherry on top

 

[Parse]

Ha! I actually went looking to see if you had already picked it as I thought you might.

I umm'd and ahh'd a little over the pick and wondered if waiting for February would be a better idea. Oil is more likely to stabilise by then and SEA would have a quarterly out with hopefully some included hedge prices. Then knowing myself I figured if I let it go and picked something else in Jan the damm thing would most probably go gangbusters. Guess a bit of FOMO got me for January.

 

[Sdajii]

Ha! I actually went looking to see if you had already picked it as I thought you might.

I umm'd and ahh'd a little over the pick and wondered if waiting for February would be a better idea. Oil is more likely to stabilise by then and SEA would have a quarterly out with hopefully some included hedge prices. Then knowing myself I figured if I let it go and picked something else in Jan the damm thing would most probably go gangbusters. Guess a bit of FOMO got me for January.

I think January is going to be an interesting month across the board. I'm not entirely sure about SEA but I think you'll probably do well (well, I'm a holder so I'll do well regardless of missing out in the January competition!). By the end of February I have little doubt we're going to be sitting well above the 31c we're at now. I have very high confidence that we'll beat out fairly recent price of $1.05 (adjusted) in the first half of the year, and perhaps even $2. The main thing holding us back will be our hedging, but as long as operations continue as normal, I am confident the increasing oil price will make this a multibagger in the next few months.

I'll try to pounce on SEA for February before you get it

 

[Parse]

This is typical. SEA floundering around 30c so I picked it for Feb thinking 'it's gotta at least gain something from here!'

And it did, up 16%! Problem is it did that on Dec 31st, now 36c

grrrrr....