OK, there’s two statements that really caught the eye of Gumshoe readers in this latest teaser pitch from the Oxford Club — first, that they say it’s the “most profitable energy company in the world” … and second, that they say it will triple by the end of the year thanks to a “shocking announcement.”
But if I’m being honest with myself, I have to tell you that the reason I had to cover this piece today because the subject line of the ad read, “I bet you can’t name this company.”
To which I feel professionally bound to respond, in my inimitably mature manner, “can so!”
So let’s get on it, shall we?
The ad is signed by James Boxley Cooke, aiming to get you to join the Oxford Club for $79. Here’s the pitch about what a spectacular and top-secret company this is:
“In short, a certain energy company, a business that I estimate not one in 20,000 Americans can even name, is about to make a major announcement that will launch one of the most explosive stock run-ups in recent history.
“If I told you the name of the company right now, you would likely have no clue what I was talking about.
“And yet, according to CNN, this company is nearly 12 times more profitable than Toyota… three times more profitable than WalMart… four times more profitable than ConocoPhillips.
“It’s more profitable than Royal Dutch Shell, Exxon Mobil, BP and Chevron.
“And I’m talking bottom line profits here, not growth rate.
“Furthermore, this company manages to make more money than all these industry giants, on just a fraction of the revenue.
“It might just be the world’s most profitable company.”
Some details?
“According to their June 2012 annual report, they operate more than 6,988 wells producing natural gas, with reserves worth an astonishing $299 billion. They run 6,151 oil-producing wells. They own the largest gas transportation network in the world. They’ve installed 81 power facilities generating 37 gigawatts of power.
“They export more natural gas to Europe than any other company… And they own nearly a fifth of all worldwide supplies of natural gas.
“On top of that, they just rewarded shareholders with by far the biggest dividend increase in company history.”
And the ad says that for “one specific reason,” a “weird anomaly,” this fabulous company is three times cheaper than the competition. So who wouldn’t want to learn about something like that, right?
They also, of course, make absurd promises — such as that you might be able to “fund your entire retirement on just one stock.” That may sometimes end up being true for patient and persistent investors, but it’s certainly not something anyone should ever plan on … or promote.
They give a few examples of past wins they’ve had in their recommendations, stocks that doubled or tripled, and that’s just lovely — but of course, one stock that doubles or triples can’t “fund your retirement” unless you do something foolish like putting half your nest egg into that one stock…. and yes, like every other newsletter, I’m sure there are Oxford Club ideas over the years that they confidently expected to triple which instead fell by 50% or more (in our teaser tracking spreadsheets do have a couple 100%+ winners over the last few years like TAXI and KOG, but they also promoted possible 1,000%+ gains for a stock that turned out to be a real turkey in 2009).
Here’s another little excerpt from the long spiel about all the stuff this company does:
“Why Nobody Has Even Heard of (Let Alone Owns) This Stock… Yet
“The energy stock I’ve been talking about is a virtual baby in the energy business. Its first stock offering was less than 20 years ago.
Are you getting our free Daily Update
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just click here...“By comparison, Exxon Mobil’s origins go back nearly 150 years to the days of Standard Oil.
“But while Exxon Mobil, Royal Dutch Shell, BP and others enjoyed the benefit of a major head start, things have changed dramatically over the last few years.
“In 2012, this company’s oil exploration budget alone jumped to $6.1 billion. It will increase to $23 billion over the next three years.
“They’re opening an average of more than two new oil-producing wells every week… with 755 new oil producing wells coming online in 2011 alone.
“The firm operates gas and oil exploration projects in the United Kingdom, Vietnam, Bolivia, Russia, Algeria, Kuwait and more. As a result, they’ve set record highs for increases in gas reserves.
“The company now controls 18% of global supply. That’s approximately 35.6 trillion cubic meters, valued at around $300 billion….
“By dominating its markets, quickly expanding across the globe and consistently developing new resources, this company has created perhaps the greatest profit machine in the history of modern industry…..
“Earnings per share leapt 141%. Net profit jumped 141%. Dividend per share is up an astonishing 133%.
“Bottom line profits were nearly $45 billion. By comparison, Royal Dutch Shell had $30 billion in profits….
“Their current profit margins of 27.21% are more than double the industry average of 11.76%.”
And we hear from some outside sources, too, to help us believe that the Oxford folks aren’t just making this up:
“One of the few major analysts covering it called it a ‘mega-cheap valuation.’
“‘With the valuation insanely cheap at less than 2.7 times earnings, the stock will double as investors believe [this company] should be trading at double the current P/E multiple,’ they said.
“Forbes has called it the one ‘company investors cannot ignore.’ Adding, ‘What makes [this company] a buy is its position in the natural gas market, its massive reserves, and regional demand for the only clean burning fossil fuel around.'”
And what’s the reason that the stock is going to suddenly triple and become favored by the market? The short answer is, “it’s going to get a US listing” … here’s the longer explanation from the ad:
“To … bring the stock up to where it rightfully belongs, company executives have finally started loosening the strings.
“They now trade on the London Stock Exchange. They also have an ADR listed with The Bank of New York Mellon. Shares are traded on the over-the-counter market on the Nasdaq….
The Major Announcement… And Why it Could Triple Your Money
“This company has dominated almost every major market it’s gone after. Europe, Japan, India, China… You name it.
“But now, they’re about to go after another market…
“For the first time in company history, they’ve decided to enter the North and Latin American markets. Reports indicate they’ll target “a number of countries there, including, primarily, the United States.”
“Not only will Americans start seeing this company on billboards, TV ads and trucking gas and oil down the highways, but they’re about to see the company name on the front page of every financial newspaper across the country.
“Here’s why…
“In preparation for this big move into North America, our sources indicate that this company will soon make the shocking announcement that it will be listed on the New York Stock Exchange, the world’s deepest and most liquid market.
“When this announcement hits the mainstream media, the stock will go roaring up the charts.”
Well, that’s a long littany of clues, and a lot of hype teasing the “most profitable company in the world.” So who is it?
This is, as some of you may have guessed, the Russian gas giant Gazprom (GZPD in London, OGZPY for the sponsored US ADR on the pink sheets). Gazprom’s oil subsidiary, Gazprom Neft, is also publicly traded, by the way (GAZ in London, GZPFY on the OTCQX in the US), but this teaser appears to be for the parent (Gazprom owns more than 90% of Gazprom Neft).
And what’s the “weird anomaly” that makes Gazprom so much cheaper, by most standard valuation measures, than other major oil and gas companies? Well, my guess would be that it’s the 50.002% ownership by the Russian Federation, which has strategic imperatives that aren’t necessarily the same as outside shareholders (Gazprom is one of Russia’s “National Champions” — companies that are expected not only to grow and be profitable but to benefit the Russian national interest). About 28% of the shares trade outside of Russia, in ADRs in London and NY mostly, and those shareholders are all quite aware, I’m sure, that Gazprom is controlled by Vladimir Putin and his government.
The plus side of that is, Russia won’t take Gazprom over and de-privatize it or throw the CEO in jail as they’ve done with private companies run by upstart oligarchs in the past … but that’s only because it’s not really private to begin with since the Russia government already has more than 50% of the shares and can therefore do pretty much anything they want with the company.
There are a lot of state oil companies in the world, including some that have partially privatized and kept a large government ownership, and I don’t necessarily object to all of these as a matter of course — there are some, including Petrobras (PBR) and Statoil (STO) that I’ve invested in over the years, too, and both of those have effective 50%+ control by the government, as do, I presume, the Chinese majors like PetroChina (PTR), though Chinese state ownership always seems a bit murkier. PBR, STO and PTR all trade at substantial premiums to Gazprom, which is partly a reflection of the operational opportunities and efficiencies of those companies and partly, I presume, a reflection of the relative investor concern over government interference from China, Norway and Brasil compared to Russia. Petrobras, by the way, is also a recent cautionary tale for state oil investors — they are still a huge and regionally dominant company, with large discoveries, but they are pressured on prices domestically and also strategically directed to invest heavily and rapidly in their deepwater offshore projects that are incredibly expensive (not that this is a bad strategy, but the costs are impacting near-term earnings and driving up debt).
The other risk, coming into investors minds more recently, is that Gazprom does also have some operational challenges — challenges that are leading them to invest very aggressively both in Russia and overseas to build their supplies. They went cash-flow negative in their last report (though they did have good earnings growth, thanks in large part to currency exchange rates), and reported a lower 2012 dividend than folks were expecting, but have still been growing quite nicely.
I can’t fully analyze a company this big for you in the few minutes we have together today, but the concern seems largely to be two-fold: Gas prices and demand have been down in Europe, which is Gazprom’s largest export market thanks to their easy pipeline access, with Europeans demanding lower prices now; and Gazprom is spending a LOT of money to develop fields and expand production both at home and abroad. So yes, the company is dirt-cheap, probably absurdly so, and pays a solid dividend that beats most oil companies (the trailing PE really is under 3, and dividend yield is around 6%) but there are reasons for it to be cheaper than most of the big oil companies. Whether or not it should be this much cheaper is, of course, your call to make — it is, after all, your money.
We’ve seen somewhat similar teases over the years for the most independent large Russian oil company, Lukoil (LUKOY for the ADRs), and though Lukoil has generally moved up pretty well over the years it has not closed the discount gap — it has moved up about the same as most oil companies have over the last five years, and is still trading at a PE ratio below 5, cheaper than pretty much any big energy company in the world (except for Gazprom, of course). So the fact that it’s cheap doesn’t mean it will stop being cheap anytime in the foreseeable future — Lukoil and Gazprom both have reserves, cash flow, earnings, etc. that should give them better valuations, but they also have challenges and political overhangs that could also give them even lower valuations, there’s no rule that says a cheap company has to become less-cheap on any given timeframe, particularly if the company is cheap for real and persistent reasons.
The biggest reason for the cheap valuation of Gazprom, I would argue, is the political overhang and the state control — and I can’t imagine that going away, though it does wax and wane in terms of the importance it holds in the minds of investors. A New York listing for Gazprom would very likely help the stock, at least in the short term, but I have heard no rumors or reports of that happening other than this ad from the Oxford Club, and frankly I think it’s still unlikely given Vladimir Putin’s focus on building Moscow into more of a financial center and strengthening the Moscow Stock Exchange (which is going public in an upcoming IPO) — I suspect that Putin will want Gazprom, Russia’s largest company, to trade more actively in Moscow.
It’s possible that Gazprom could get a listing on the NYSE, I don’t know, but if it does it might just take some of the volume from London and I can’t imagine that they would issue new shares that dilute the government’s control. That’s just my opinion, of course. I don’t think that would be anywhere near enough of a push to get the stock to trade at, say, seven times earnings instead of three times earnings — for that, we would need investors to revalue Russia in general and to change the way they discount Gazprom for being a “national champion.”
The bit from the tease about Gazprom tackling the US included a quote from an article, but that was a Russian article about the potential for Gazprom to export LNG to the US and Mexico. That might happen, but the more likely push from that is Gazprom partnering with Pemex to help them boost gas production in the Gulf of Mexico — shipping LNG from Russia to Mexico and the US would just be stupid. Gas is worth far more in Seoul, Tokyo, or even Rome or London than it is anywhere in the Americas, and US pipeline supplies of cheap gas from our booming shale regions are likely to depress investment demand for gas production in Mexico.
The “major analyst” they quote as calling Gazprom “Mega-Cheap” seems to be a Seeking Alpha contributor, though certainly other analysts have noted that it’s at a very low valuation — that SeekingAlpha article is here if you’d like to read the bull case, which is basically that the shares will double because investors will close the PE gap between Gazprom and other energy majors.
And the bullish Forbes quote is from a contributor who wrote a bullish article back in 2011, you can see that here. And yes, Gazprom is probably the one Russian company investors “cannot ignore”, but that’s also largely because it’s so freaking huge — Gazprom is 8% of the most widely traded Russia ETF (the Market Vextors RSX), and is a far larger holdings in other funds that aim to represent the Russian market like ERUS (19% Gazprom) or RBL (17% Gazprom).
If you want a less optimistic take, Reuters had a pretty good brief article here covering Gazprom’s most recent earnings, including quotes from some analysts who have concerns over capital spending and efficiency. There has also been recent concern about Russia loosening up the monopoly that Gazprom has over gas, partly to spur faster investment in LNG export facilities (an area where they are about as far behind the gas-exporting world as the US).
So there you have it — Gazprom’s cheap, no argument there. The Oxford Club folks seem to think it’s going to triple this year because folks will realize they’re too cheap and they’ll get a NY listing. I have invested in a few Russian companies over the years and own one now, but I can’t say that I know this company particularly well and I don’t really have any interest in buying a Russian commodity producer, even one as cheap as Gazprom — but that’s just me. What do you think? Let us know with a comment below.
I want to echo the comment made by Olivian Leach…that buy-and-hold went out long ago. We are NOT obligated to keep a stock as it loses half its value. A sell costs me only about $8.00 with an online account, and another $8.00 to buy it back if I want to do so.
So I think a wise approach is to sell any stock that falls about 12% below its high. I do not allow an argument with myself. I simply sell.
Karen…selling at a 12% drop is called a “stop-loss” policy. This policy very effectively stops the losses. Funds from the sale can then be put in some other stock (that is NOT falling, but in an up-trend pattern).
Another way to think is this: Never marry a stock. Get rid of losers as quickly as you can.
With so many negatives in the world right now, anyone that doesn’t have at least a decade before they might need to start using their life savings is foolhardy to gamble in stocks. Everyone, including Jim Cramer, thought that Apple was the savior for both our GDP and investors. We have learned that even the giants can fall. There are millions of baby boomers retiring every year, and my guess is that they won’t risk their life savings on risky investments. Most American corporations, like our Federal Government, carry significantly more debt than cash. Revenue might be good, but that may be temporary if our economy stays sluggish. Just ask CEO’s of Hostess Brands or American Airlines. About the only thing that one might be able to count on is that in the future, natural resources are going to rise in price. Those commodities that sell on the Chicago Board of Trade that are at multiple year lows are going to be sound investments. Natural gas and lumber are just two examples that are going to do well into the future. Both have exchange traded funds, UNG is one example in natural gas and CUT is an example in lumber. Another sure thing is that interest rates are going up in the future. When that happens, exchange traded funds like TLF and TBT that bet on bond values going down are going to rise. The only risk in these types of investments are timing, since no one knows when interest rates will rise or when economic recovery is going to occur. There are numerous companies that pay solid dividends like CXS, ARLP, LMT, VZ and others where earnings are sufficient to maintain or grow the dividends, however, be wary of companies where the earnings are less than the dividend. That could pose not only a risk for a decrease or termination of the dividend, but could also result in a large decrease in the stock price.
Blue in Florida says:
For decades the USSR sucked excellent oil out of Baku and other neighbors and never really exploited their own vast supplies of oil and gas. Why? Russia has the dirtiest oil in the World, which should stay in the ground! Putin runs business like the Mafia, crushing all who dare to defy him. Pipelines out of Baku and other incredible resources around the Black Sea and elsewhere could easily feed the “Stans” countries all the way to China. Why did the Soviets want Afghanistan so badly? We all sit around and watch as our current government follows a Putin-like strategy: Shutting down the life-blood TRP pipeline for no sane reason, holding up permits on trillions of dollars of oil and gas projects, cutting deals with Buffet and his railroad to further kill the TransCanadian and tens-of-thousands of jobs, and on and on. Canada must have condensates, which we have enough to gag on and we must have dirt cheap tar sands oil. Why again is production of NGL being slowed by our fearless leaders and what authority do they have to run oil corporations like Putin’s State operations?
….a tad political I think….lets get back to investing.
Politics also determines your investment growth. Know about it. Nothing functions in total isolation.
Interesting comment on UNG, By A.M Deist. UNG was $500 less than 10 years ago, now about $18. The most recent quarterly report 10-Q, shows $23 million in Treasury and Money market funds:
http://www.sec.gov/Archives/edgar/data/1405513/000114420412062883/v324929_10q.htm
What is this? I believed that it was a “natural gas fund”. Am I wrong or are these more deceptive marketers? ( like the “Oil Trust” bandits. MV Oil Trust is $26, with 13 years to go in the trust payments, and supposedly yields 10.4% ($2.70 per year). Except that they cleverly deceive us by not telling us that $2 per year will be lost in the next 13 years, since this will have no value at the end. MVO would then really yield 70 cents per year, or 3%, NOT 10%!) cheers
Roger
Roger: UNG wasn’t trading 10 years ago, however in 2007 it was trading in the $51 range. The reason for the drop was that spot natural gas prices came near ten year lows during winter 2011-2012. If you noted in my original comment, I didn’t suggest buying a natural gas ETF 10 years ago, however, I am suggesting one might want to do so today.
Hi A.M. – If you look on the marketwatch.bigcharts site http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ung&insttype=&freq=2&show=&time=13
It appears that UNG was trading 10 years ago, at $500. Yes it may be a better investment now, but the question remains, what happened? It seems there is no “investment” per se, it is all US treasuries and CD’s, when you go to the SEC edgar site for quarterly reports. Thus it is all leveraged options, which can be very volatile, and such, are not truly tied or backed by the commodity, yes? It’s not like shares in a gas producer company. Same with BOIL, someone is making a futures contract on your behalf. YES?
Roger: You are correct about BOIL, UNL and UNG doing futures and option contracts. The reason, however, that it is a good investment now is because it is at multiple year lows. And you are right that some of the products are very volatile. But, from what I have seen, these funds track natural gas prices, and there isn’t a commodity that will stay at multiple year lows for an extended period. While economics works on a supply-demand curve, it seems that when supply rules, demand starts going up because of cheaper prices, or supply starts dropping because of the costs to produce that supply versus the gains to be made by selling it at low prices. There is one thing that you can put in the bank. No commodity will ever go bankrupt. It might go out of existence, but if that happens, the price will skyrocket before it is gone. The main risk to commodities is that there will be a replacement that could significantly reduce demand, but that normally takes decades. We have been talking about coming off oil for probably more than 100 years, yet we are no closer than we were 100 years ago.
A.M. – I agree that nat gas is probably one of the best commodity opportunities. I have worked with Westport in Canada, almost 15 years ago, and it really has not gone very far in that time. The question in my mind is are we better “speculating” with a BOIL or UNG, or with a gas company, with resources in the ground, instead of a peice ofpaper for a “futures” price? Something “in the ground” somehow feels better to me. The the questions is, which company is “the best” to invest in?
Thanks. Roger
Gazprom. Listed on the London & Frankfurt Exchanges.
It is coming to the N.Y. Stock Exchange.
Bigger than Exxon, Wal Mart, Shell.
Trades @ 3X earnings.
BonnieEmber: You had better google Gazprom risks before jumping into the fire. Don’t believe everything you read in newsletters. There are great investments in Russia, but even if Gazprom does come on our exchange, I would be wary. And if you believe it is a good investment, you should having your broker buy it on the London or Frankfort Exchange and not wait. It might not get listed in the United States.
also on the US over the counter, as OGZPY
Dear A.M.
This is a very young company compared with the 150 year old Chevron.
Might as well get onboard, while she is still unknown in America.
Once a few analysts pick her up, & she is in the Limelight, she will do well.
There is too much global demand for LNG. Fed Ex, Wal Mart, et al are converting their Trucks to LNG.
…that is until 3D printing, makes trucking goods, obsolete.
So, enjoy the ride up & thank you for your comments.
Please share everything that you see from the Crow’s Nest, as well.
If you went through the wringer, in ’08, like most of us, This may just be the Newbie Stock that we all need.
Time alone will tell.
Bonnie: As I was saying Gazprom (GXPFY) has many risks. It is down 10.9 percent from its closing price on January1st this year, even though natural gas and oil are both up.
BonnieEmber: I totally agree with you on the bright future of Natural Gas. That said, I feel that an ETF like BOIL is a much better investment than a Russian Company. It also offers options for covered calls to help lower downside risk while waiting. And if you like Russia for investing, YNDX is a much better bet. Like Google in the United States and Baidu in China, YNDX is the one in Russia. I agree with your comment about the future of natural gas. There are about four industrial commodities that are at multiple year lows. Natural gas dropped when fracking started exceeding the demand, but demand is going to catch up and exceed supply in the future. It is also with little doubt that interest rates are going to rise in the future. ETF’s like TLF and TBT are good investments for the future in that area. You can have your Gazprom. I will stick with BOIL.
Roger: Of the top 10 companies involved in natural gas, there are only two with more cash than debt. The largest XOM pays a dividend of 2.6%, while CVX pays a dividend of 3.1%. Were I to pick, I would invest in CVX. The concern I would have, however, would be a market selloff, which will take all boats down. I feel more comfortable with a pure play on natural gas, since it isn’t as risky to S&P selloffs.
Roger: Here is a prime example of why I like BOIL rather than a company. Today, natural gas was up, but all the major companies that deal in natural gas were down. I am bearish on our markets with an unknown future and a clear end to QE coming sooner rather than later.
xom -1.68%
chk -6.78%
wprt -2.36%
cvx -2.09%
clne -2.59%
boil +7.12%
I’ve owned Niska for over a year, rode it down from much higher. My bad, but one aspect of owning a low price high yield stock is that you sure accumulate a lot of shares fast if you’re re-investing the dividends. Some of us older guys have to reach for returns, but if I had 30 years to invest for retirement I would not bother with most of the crap newsletters promote. Instead I would invest in stocks from a high quality company with a history of increasing dividends over many years.
Roger: The proof is in the facts. I have made 12.9% in the past two months on BOIL. I sold covered calls and didn’t maximize my profits, but lowered my downside risks. I am now taking reverse positions in oil and natural gas, as world economies and higher temperatures will put a strain on both. I also like the 10 year treasury bear because the FED is going to end buying treasuries sometime soon, and rates are going up. Also, the two largest buyers of our debt are now the FED and American citizens, and both are going to take a bath when rates rise. Irrespective of what the FED does to unwind its holdings, they are going to lose billions, and I am hoping our Congress doesn’t use taxpayers dollars to bail them out.
Anyone have any comments about 10-86 investments?
Dean: Most of the royalty trusts have a greater payout than they do earnings. Dorchester Minerals is one that has been touted as a good one by some gurus, and Jim Cramer is ususally talking about Kinder Morgan. Permian Basin (PBT) is one of the very few that has greater earnings $1.16 than it’s 5.8 percent 73 cent payout.
I started a number of years ago with a Broker when the discount brokers did not exist.
I was put into mutual funds but when allowed, did it myself. With Fidelity. But kep a small account with a broker. Could ask for advice that discounts do not give. Somehow managed to increase my small holdings. Got out in time in 1987 but not so swift in 2000 an 2008.
Over time, I did start to eliminate the funds and chose stocks not always well. Remember Worldcom? And Viatel?
Now I am in retirement and hold high dividend stocks, and MLP’s such as Kinder Morgan and EPP which give good dividends or payouts. But, I hold them in IRA’s as the IRS paperwork on them is so difficult (for me) But, beware to keep the income low as I have learned that if it is over $2000 a year in an IRA you have to report for tax. Do not know whether that rule still exists.
High dividend paying stocks are the best for people like Karen as well.
I do subscribe to a number of investment papers also. Just for ideas.
claudina wrote: “But, I hold them in IRA’s as the IRS paperwork on them is
so difficult (for me) But, beware to keep the income low as I have
learned that if it is over $2000 a year in an IRA you have to report
for tax.”
Last I saw (during my 2012 income tax preparation), It is NO MORE
THAN $1000 per year income from MLPs.
Whenever we deal with a state owned company, I suspect that beside business interests
they must abide to state dictated instructions, sometimes for political reasons. If they will be in NYSE . the business side perhaps will prevail. In the meantime I wait. Sergio Minerbi
your GZPD comments were very interested. Keep up the good work guys
Dimitris
Mauldin’s Bullseye Investor newsletter bought it at $6.75 back in June, just sent out an alert about it yesterday.
Roger.
This has been a great discussion. Speaking of managing our own $: I use Sharebuilder via the internet. Low trade prices, friendly and helpful folks. I use Sharebuilder and Motely Fool for research purposes. I’m about to retire from teaching and need to roll over a 50K account. I’m a bit nervous but would rather manage this $ myself than pay fees to someone who may not really have my back…I’ve got another IRA that I’ve been managing for my husband and have been using the Motley Fool funds, which are doing well, especially the American Fund.
WHAT IS NEW about Gazprom and its stock AFTER the above comments were written is the EXPECTATION that Gazprom will RAISE its dividend to about triple its present level. This expectation follows public statements by Putin. Before these public statements Gazprom stock price was slowly and gradually falling. After these statements the price has been slowly and gradually rising. It looks as if it will soon rise to where I bought it after reading OxClub’s extremely vigorous (almost hysterically intense) recommendation to buy it early this year.
Can we believe Mr. Putin? After all he took Robert Kraft’s ring, documented on video recording, then denied taking it, and finally offered to have a replica made. The replica should be worth far more than the original, whether or not Kraft realizes it. So I think that Putin is reasonably sincere and realistic–and, therefore reasonably believable. Is Putin substantially less believable than US corporations are about their businesses? Probably about the same. So, I will continue to hold Gazprom, believing it will rise in expectation of increased dividends, and even more if a higher dividend is announced.
Hey! Everybody, what…about the kosmos energy (KOS)?
Loong While KOS has a good quarterly revenue growth and more cash than debt, they have a negative return on equity and negative earnings. I would limit my investment to companies that offer dividends, have zero debt, good growth and a low PEG and EV/Revenue. That said, I would be very careful in this market because there is no visibility of the future. The Republican House of Representatives could very easily put the United States back into a recession. Why take unnecessary risks?
I joined The Oxford Club in late January of this year. Along with papers that were sent to me was recommendations to buy TRQ & GTI, which I did. In less than a month, they were almost 50% down. I cancelled my membership. In May, I received in the mail another solicitation to join The Oxford Group and another buy on GTI. I was appalled!
I still own both stocks with about a 60% loss. The Oxford Club is a joke!
Here is how to use the OxClub’s investment advice. Follow what Alexander Green writes and identifies as having written. Ignore all other advice.
TRQ has negative earnings, a current ratio of .32, and more than ten times their debt to cash. GTI has great fundamentals with positive earnings, a current ratio of 3.94, a book value greater than the stock price and a great price to sales ratio. The only discouraging statistic is their almost –90% quarterly earnings growth. Were I going to keep either of these two stocks, my recommendation would be to sell TRQ and put the money in GTI.
But if you like speculative stocks, you might take a look at ONVO. They are working with 3D printers to make skin and human organs for transplant. They also have great fundamentals with more cash than debt and positive earnings. For full disclosure, I own ONVO. I am down 6% from my buy price, but am looking for long term growth.
Karen:
Hoping you are still reading this section on comments, I welcome you to the Gumshoe club. I don’t know of a better place to be in in this business. At 74, I only started messing with the stock market about 5 years ago. I did an experiment selecting the stock myself and did pretty good, I only lost about $1000. But I learned the lesson. Before you buy any stock, anywhere or by whichever means, RESEARCH tirelessly. Mainly, look at that stock’s past history. I use Yahoo Finance for that. And now I have set up a procedure: I only invest in DIVIDEND stocks with established performance with high dividend (above 9%) and little or no volatility. Take a look at CODI, WIN and STON. Also, don’t disregard canadian stocks. The CA stock market is NOT prone to the hocus pokus of the US version, or outright thievery.
It’s REALLY important advice about not getting married to a stock. You can usually buy back on a later dip. Think of it as an opportunity to re-buy the stock at an n% discount. If you bought 100 shares @ $10, and are stopped out at £8….. so long as you still believe in the stock, you’ll likely be able to buy back on a dip at $7, so have gained 14 ‘free’ shares. Sooner or later they will come back (if its a fundamentally strong company like the sort Travis and Warren Buffet tend to invest their hard earned in)
Print it out and stick it on the wall in front of your screen.
PS A great example is SAND. Travis loved this stock for an age. Eventually I bought in and went away on hols …..just before he got divorced (from the stock) It crashed next day. Oh how we laughed. Thanks for that one stinkalator 🙂
Fortunately I set a stop, so If he ever falls in love with it again, Ill be able to buy extra shares….always accentuate the positive.