On the
other hand, Philipp Hofflin was saying this about Woodside a week ago, 15 Dec 2024:
Hofflin: "Given the strong gains in the general insurance sector, we now see
the energy sector as the most undervalued opportunity. We see
Woodside (ASX: WDS) as the best opportunity in this sector and it is one of our largest positions.
The share price is still about 30% below the pre-COVID levels and down 35% from a year ago odd ... and all that with the Asian gas price at US$15/mbtu! It trades on an about 15% FCF [free cash flow] yield, although it does have growth investment commitments, of course.
Since the GFC, WDS has traded on the same EV/EBITDA multiple as the S&P 500 Energy index – if that were the case today, WDS’s share price would be $42/share - or 70% higher. The sell-down of Louisiana LNG, expected sometime in the first half of 2025, may be the catalyst to reduce the deep discount Woodside is on."
It's been rough to watch the most expensive companies in the market get even more so. But that doesn't mean opportunities don't exist.
While I don't exactly follow Philipp Hofflin I avidly read anything I come across by him since he said this about
WDS and
Whitehaven Coal (
WHC) back in
Oct 2020 - WHC was
$1:
"If you aren’t long energy now, you probably never will be"
"Hofflin explains why Australia’s largest gas producer Woodside and mid cost curve coal miner Whitehaven are so appealing at current prices, albeit as “special high-risk, high-return propositions.”
Demand for hydrocarbons is driving a quarter-decade investment opportunity, despite a revolution in electric vehicles and renewables over the longer term, says Lazard Asset Management portfolio manager Dr Philipp Hofflin. The current $166 price of a barrel of oil equivalent (BOE) is the lowest...
A quick look at the charts will tell you what it would have rewarded you to act upon this advice around that time in Oct 2020 (I didn't) - especially Whitehaven, no one wanted WHC.
Held