Question: I would appreciate your thoughts on Santos, Origin Woodside and the LPG sector generally as at the moment my losses on these shares are quite high.
Answer (By Paul Rickard): I don’t really like the sector and can’t yet see any reason to go long oil/lng stocks. If I had to choose, I prefer Woodside in the short term (less risk), and for the long term, probably Santos. In regard to the latter, I am wary that the market might yet force Santos into a capital raise.
For a collected opinion, here is what the brokers say. According to FN Arena, on a sentiment/discount scale, Santos is most preferred, and Woodside the least. Here is how the stocks stack up:
- Origin (ORG) – sentiment +0.3, target price $6.69
- Santos (STO)– sentiment +0.9, target price $8.03
- Woodside (WPL) – sentiment -0.1, target price of $32.14
(Sentiment – scale -1.0 is most negative, +1.0 is most positive)
Question: I have been most interested in Capitol Health (CAJ) and have bought at several levels. They are in a reasonable sector and management appears OK. They are expanding well and have good balance sheets. Debt also seems manageable. Why would then their price drop from 1.08 to 60c?
Answer (By Paul Rickard): Not sure whether I can really explain the price fall in Capitol Health (CAJ), apart to note the exit of a couple of substantial shareholders (MLC etc).
Also, the stock was trading at pretty racy multiples – 2015 EPS of 2.49c per share, which at a price of $1.00, put the stock on a historical multiple of 40.2 times – back at $0.60, a multiple of only 24.1 times.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
