2021 Stock Market

[Dr.bannedman]

Here are two long term moneymakers for those of you who aren't daytrading meme stocks.

#1 Oxidental Petroleum. Ticker: OXY $28.80

Levered play on the oil rebound, got taken to the woodshed with the pandemic because of their very high debt structure. Almost went bankrupt. With a rebound in oil pricing due to the recovery and a lack of capital investment in the industry, their FCF is insane. And with oil seemingly heading to $100 over the next 3 years, this company will have a license to print money. They'll have their debt in line by late 2022 and trade in the $70-100 range. The debt allows you to buy it at a significant discount to it's peers such as EOG. (which also is a good play)

If you really want to leverage some upside, instead of buying the commons, buy the warrants. Ticker OXY.WS $12.37. Each warrant represents the option to buy one share of common stock for $22.00 and expires in August of 2027. If the share price hits $100, the warrants will trade for at least $78, plus any time premium depending how far away from 2027 it is. ($100-22=78) Not many investments out there that offer the opportunity for a 6 bagger plus with limited risk.

#2 Digital Turbine, Ticker APPS $72.70.

This is a company that is still pretty much flying under the radar. What do they do? Basically it's a mobile phone/smart device advertising play. Their main businesses involve partnering with cell phone providers like Verizon and sell spots for preinstalled apps on their phones. They also have new products that are even more promising, one called Single Tap that they can embed in digital ads or games that allows the customer in a single touch to download an advertiser's app directly without being forced into Google or Apple's app store. It not only offers more cost effective engagement with advertisers, but boxes out the app stores and their cut as well.

It's a high flyer, and like The Trade Desk has a product that's going to significantly change the digital advertising landscape, but trades at about half the price and has 1/4 the market cap. No reason this thing shouldn't be a 5-10 bagger in 5-10 years. They have a chance to be the dominant player in the space if they don't get bought out before that happens. They are already profitable.

Let me know if you have any questions or thoughts about either of the two.

this is the **** i like. we need a stocks/investment thread. opt in only WITH CURSING.

 

[Gunnerclone]

Here are two long term moneymakers for those of you who aren't daytrading meme stocks.

#1 Oxidental Petroleum. Ticker: OXY $28.80

Levered play on the oil rebound, got taken to the woodshed with the pandemic because of their very high debt structure. Almost went bankrupt. With a rebound in oil pricing due to the recovery and a lack of capital investment in the industry, their FCF is insane. And with oil seemingly heading to $100 over the next 3 years, this company will have a license to print money. They'll have their debt in line by late 2022 and trade in the $70-100 range. The debt allows you to buy it at a significant discount to it's peers such as EOG. (which also is a good play)

If you really want to leverage some upside, instead of buying the commons, buy the warrants. Ticker OXY.WS $12.37. Each warrant represents the option to buy one share of common stock for $22.00 and expires in August of 2027. If the share price hits $100, the warrants will trade for at least $78, plus any time premium depending how far away from 2027 it is. ($100-22=78) Not many investments out there that offer the opportunity for a 6 bagger plus with limited risk.

#2 Digital Turbine, Ticker APPS $72.70.

This is a company that is still pretty much flying under the radar. What do they do? Basically it's a mobile phone/smart device advertising play. Their main businesses involve partnering with cell phone providers like Verizon and sell spots for preinstalled apps on their phones. They also have new products that are even more promising, one called Single Tap that they can embed in digital ads or games that allows the customer in a single touch to download an advertiser's app directly without being forced into Google or Apple's app store. It not only offers more cost effective engagement with advertisers, but boxes out the app stores and their cut as well.

It's a high flyer, and like The Trade Desk has a product that's going to significantly change the digital advertising landscape, but trades at about half the price and has 1/4 the market cap. No reason this thing shouldn't be a 5-10 bagger in 5-10 years. They have a chance to be the dominant player in the space if they don't get bought out before that happens. They are already profitable.

Let me know if you have any questions or thoughts about either of the two.

Those stocks could be meme stocks tomorrow. Buy dip. Sell never.

 

[Big Daddy Kang]

CLF

 

[Sigmapolis]

Here are two long term moneymakers for those of you who aren't daytrading meme stocks.

#1 Oxidental Petroleum. Ticker: OXY $28.80

Levered play on the oil rebound, got taken to the woodshed with the pandemic because of their very high debt structure. Almost went bankrupt. With a rebound in oil pricing due to the recovery and a lack of capital investment in the industry, their FCF is insane. And with oil seemingly heading to $100 over the next 3 years, this company will have a license to print money. They'll have their debt in line by late 2022 and trade in the $70-100 range. The debt allows you to buy it at a significant discount to it's peers such as EOG. (which also is a good play)

If you really want to leverage some upside, instead of buying the commons, buy the warrants. Ticker OXY.WS $12.37. Each warrant represents the option to buy one share of common stock for $22.00 and expires in August of 2027. If the share price hits $100, the warrants will trade for at least $78, plus any time premium depending how far away from 2027 it is. ($100-22=78) Not many investments out there that offer the opportunity for a 6 bagger plus with limited risk.

#2 Digital Turbine, Ticker APPS $72.70.

This is a company that is still pretty much flying under the radar. What do they do? Basically it's a mobile phone/smart device advertising play. Their main businesses involve partnering with cell phone providers like Verizon and sell spots for preinstalled apps on their phones. They also have new products that are even more promising, one called Single Tap that they can embed in digital ads or games that allows the customer in a single touch to download an advertiser's app directly without being forced into Google or Apple's app store. It not only offers more cost effective engagement with advertisers, but boxes out the app stores and their cut as well.

It's a high flyer, and like The Trade Desk has a product that's going to significantly change the digital advertising landscape, but trades at about half the price and has 1/4 the market cap. No reason this thing shouldn't be a 5-10 bagger in 5-10 years. They have a chance to be the dominant player in the space if they don't get bought out before that happens. They are already profitable.

Let me know if you have any questions or thoughts about either of the two.

I wouldn't want to buy into petroleum right now.

There is way too much available supply for prices to stay up for long.

Prices were about $40 to $50 two years ago because that is where the swing producers on the market -- that is, unconventional developers in the U.S. -- can operate.

Marginal producer sets the marginal price.

This one is a dog with fleas. Sell. Heck, short.

 

[frackincygy]

I was only comparing TTD as another player in the digital ad space who is in a good spot. It was more to give an idea about what APPS can become. IMO TTD's run is only beginning as well. Their replacement for the cookie will be a home run.

Hindsight will show that the purchase of APC was a brilliant move. It became a much riskier endeavor when Covid crashed crude. Also keep in mind that it's only by pretty much dumb luck that CVX ended up with NBL for a song. CVX's bid for APC was only $5B away from owing APC themselves. Those who were in it for the dividend would vehemently disagree, but that's ok. The merger was about using synergies for a lower cost of production in a consolidating industry. They will be the low cost producer in the Permian, and that oil in the ground is now worth a lot more than they paid.

The talking heads are saying that after a decade of declining investment, a supercycle is beginning. All boats are going to get lifted. My only concern about the supermajors is what the governments of the world are going to do to them over this climate nonsense.... with Royal Dutch Shell being the latest example. It might be better to limit exposure primarily to North America, or like you said, the LPs and service companies. Been nibbling on some RIG and ET as well.

And yes, retirement on that beach (or tiki bar) is what I hope we all can do!

Did you see $OXY just sold 25,000 acres in the Permian for $20k per acre. IIRC they bought the $APC acreage for nearly $70k per in the same basin - Probably a combination of 'non-core asset trimming' and 'debt reduction' but it seems like a strange transaction to me. Market seems mixed (neutral) on the transaction though.

 

[BCClone]

Did you see $OXY just sold 25,000 acres in the Permian for $20k per acre. IIRC they bought the $APC acreage for nearly $70k per in the same basin - Probably a combination of 'non-core asset trimming' and 'debt reduction' but it seems like a strange transaction to me. Market seems mixed (neutral) on the transaction though.

How long did they own it. Did they pull production off and feel it had been depleted some? Did they develop a core piece and sell an outlier? P

 

[frackincygy]

I wouldn't want to buy into petroleum right now.

There is way too much available supply for prices to stay up for long.

Prices were about $40 to $50 two years ago because that is where the swing producers on the market -- that is, unconventional developers in the U.S. -- can operate.

Marginal producer sets the marginal price.

This one is a dog with fleas. Sell. Heck, short.

Here's the thing. Despite what the media wants to tell you, petroleum isn't going anywhere anytime soon - the fact is that between pharmaceuticals, plastics, personal care products, fertilizers, etc. petrochemicals aren't going anywhere. Petroleum is also one of the most economical 'on-demand' energy sources we have at the moment - could that change with a technological breakthrough, sure - but to 'short' based on the 'hope' of this breakthrough would not be an advisable strategy IMO.

Your $40-$50 per barrel production cost is also not nearly as accurate as you seem to think it is - producers in the Permian can 'break even' at sub-$35 oil. This will also likely continue to trend lower as the pipelines in the region are developed further - not to mention that well stimulation strategies are iteratively improved and will continue to see further gains as well mapping technology is paired with AI data analysis as the industry (like many others) transitions to 3.0.

None of the above is accounting for any type of conflict in a region which has been battling for millennia nor other OPEC+ nations which are subject to varying political challenges. My $0.02.

 

[frackincygy]

How long did they own it. Did they pull production off and feel it had been depleted some? Did they develop a core piece and sell an outlier? P

I don't follow $OXY that close, so I cannot answer your questions accurately. I don't think the acreage is from the $APC transaction, rather from an earlier purchase of a smaller producer in the basin.

Here is a link to a copy of the PR:

Occidental Announces Continued Progress on Divestment Program with the Sale of Non-Strategic Permian Basin Acreage for $508 Million and Reaffirms 2021 Capital and Production Guidance

seekingalpha.com

Merely commenting on the puzzling 'buy high, sell lower' face value of the transaction.

 

[Sigmapolis]

Here's the thing. Despite what the media wants to tell you, petroleum isn't going anywhere anytime soon - the fact is that between pharmaceuticals, plastics, personal care products, fertilizers, etc. petrochemicals aren't going anywhere. Petroleum is also one of the most economical 'on-demand' energy sources we have at the moment - could that change with a technological breakthrough, sure - but to 'short' based on the 'hope' of this breakthrough would not be an advisable strategy IMO.

Your $40-$50 per barrel production cost is also not nearly as accurate as you seem to think it is - producers in the Permian can 'break even' at sub-$35 oil. This will also likely continue to trend lower as the pipelines in the region are developed further - not to mention that well stimulation strategies are iteratively improved and will continue to see further gains as well mapping technology is paired with AI data analysis as the industry (like many others) transitions to 3.0.

None of the above is accounting for any type of conflict in a region which has been battling for millennia nor other OPEC+ nations which are subject to varying political challenges. My $0.02.

Interesting perspective. Thank you.

Your main point, though -- U.S. shale producers can get by on $35 per barrel or less -- only makes my point for me, though. @usedcarguy was saying prices were going to rise even further and have a sustained period of being >$100, which would obviously give a great return if you invested into that.

I just don't see it happening. Too much supply out there that can come back online.

On the demand-side questions, I am more agnostic. I just think the short-term issue with petroleum prices tend to be on the supply-side. Demand-side is going to determine things decades hence.

 

[frackincygy]

Interesting perspective. Thank you.

Your main point, though -- U.S. shale producers can get by on $35 per barrel or less -- only makes my point for me, though. @usedcarguy was saying prices were going to rise even further and have a sustained period of being >$100, which would obviously give a great return if you invested into that.

I just don't see it happening. Too much supply out there that can come back online.

On the demand-side questions, I am more agnostic. I just think the short-term issue with petroleum prices tend to be on the supply-side. Demand-side is going to determine things decades hence.

My take on this point is that the recent 'oil recession' (summer 2014 - present) has really limited the large exploration type projects. Companies have been drawing from 'proven' reserves, preferring the strategy of maintaining production levels, reducing the debt they can, and 'staying in business'.

You're correct that there are a significant number of DUCs, but it takes quite a bit longer to drill a new well (~45-60 days) than it does to stimulate a DUC (~7-21 days) - without accounting for the bureaucratic time/efforts for permits, etc. required for a new drill. At some point DUCs will be overtaken if prices remain 'higher'.

Again, all the above doesn't account for any political/ social unrest which could significantly impact the market.

 

[usedcarguy]

Did you see $OXY just sold 25,000 acres in the Permian for $20k per acre. IIRC they bought the $APC acreage for nearly $70k per in the same basin - Probably a combination of 'non-core asset trimming' and 'debt reduction' but it seems like a strange transaction to me. Market seems mixed (neutral) on the transaction though.

From what I'm hearing it was low productivity land. Per a post in another group:

<<<10k boe/day from 360 wells is just 28 boe/day on average from each well. this is pitifully low in comparison to the permian average at any given point through all of 2019 and 2020, which was usually well north of 600. the US average is over 100. let them have it; not all permian acreage is the same.>>>

If you're trying to be more efficient with capital expenditures, it makes perfect sense to sell off less productive pieces.

 

[usedcarguy]

I wouldn't want to buy into petroleum right now.

There is way too much available supply for prices to stay up for long.

Prices were about $40 to $50 two years ago because that is where the swing producers on the market -- that is, unconventional developers in the U.S. -- can operate.

Marginal producer sets the marginal price.

This one is a dog with fleas. Sell. Heck, short.

To the contrary. We no longer have the global capacity meet pre-pandemic consumption levels.

Our oil glut (which came to be because of horizontal fracking) caused a decade long decline in capital investment. COVID in one fell swoop took out all of the excess capacity and created a bottom.

Production has fallen substantially, and those who haven't gone bankrupt have big debt loads on their balance sheets they'd like to clean up before moving forward. Companies emerging from bankruptcy are going to be more interested in maintaining cash flow and solid balance sheets than taking on a bunch of debt to lever back up.

JP Morgan Chase, Goldman Sachs, and Schlumberger are all saying we are in the early stages of an oil supercycle, with a near term supply shortage that is going to cause a massive spike going into 2022 as the economies of the world return to normal, and a solid supply/demand balance in the years to follow. Don't be surprised when oil is $100 within 3 years.

 

[Sigmapolis]

To the contrary. We no longer have the global capacity meet pre-pandemic consumption levels.

Our oil glut (which came to be because of horizontal fracking) caused a decade long decline in capital investment. COVID in one fell swoop took out all of the excess capacity and created a bottom.

Production has fallen substantially, and those who haven't gone bankrupt have big debt loads on their balance sheets they'd like to clean up before moving forward. Companies emerging from bankruptcy are going to be more interested in maintaining cash flow and solid balance sheets than taking on a bunch of debt to lever back up.

JP Morgan Chase, Goldman Sachs, and Schlumberger are all saying we are in the early stages of an oil supercycle, with a near term supply shortage that is going to cause a massive spike going into 2022 as the economies of the world return to normal, and a solid supply/demand balance in the years to follow. Don't be surprised when oil is $100 within 3 years.

Not saying that you are wrong, but you are betting pretty hard against the NYMEX...

NYMEX peaks at $70 in July 2021 before sinking back through the $60s the next two years.

Then down into the $50s in subsequent years. No long-term or sustained $80+ period.

https://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude_quotes_globex.html

You might be right. But trading on commodity prices is well... difficult.

 

[usedcarguy]

My take on this point is that the recent 'oil recession' (summer 2014 - present) has really limited the large exploration type projects. Companies have been drawing from 'proven' reserves, preferring the strategy of maintaining production levels, reducing the debt they can, and 'staying in business'.

You're correct that there are a significant number of DUCs, but it takes quite a bit longer to drill a new well (~45-60 days) than it does to stimulate a DUC (~7-21 days) - without accounting for the bureaucratic time/efforts for permits, etc. required for a new drill. At some point DUCs will be overtaken if prices remain 'higher'.

Again, all the above doesn't account for any political/ social unrest which could significantly impact the market.

Correct. That's exactly what is happening. Deepwater drilling was the hardest hit in the last several years. Many rigs have been cold stacked for so long that their value is scrap. Salt water is hard on equipment, especially when it's not in use.

Many warm stacked rigs have been sitting long enough that that it will be prohibitively expensive to bring them back without sky high oil because of the costs to do so and their relative inefficiency compared to newer rigs. We currently do not have enough production for when demand returns to pre-pandemic levels and the strategies you mentioned are going to be the new normal for the next several years.

 

[Sigmapolis]

@usedcarguy

I asked my oil friend about your stance...

lol
dude they say that every time
oil producers love to produce oil
there will be a glut again in a couple of years
"oh, we're really going to tighten our belts this time"
big oil companies are going to buy up the small independents acreage and drill like 10 mile laterals
I would rather put money on $40 oil in 3 years than $100 oil for a prolonged time

 

[usedcarguy]

Not saying that you are wrong, but you are betting pretty hard against the NYMEX...

NYMEX peaks at $70 in July 2021 before sinking back through the $60s the next two years.

Then down into the $50s in subsequent years. No long-term or sustained $80+ period.

https://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude_quotes_globex.html

You might be right. But trading on commodity prices is well... difficult.

There are definitely diverging opinions, but if you look at the the historical volatility in those contracts. And more importantly, look at the trendlines in those contracts, the Dec 23 contract is up $14 YTD and is $6-8 above what it was pre-pandemic at a time when production levels were much higher. That seem to indicate that the $50-$60 range should be the floor.

I expect a fair amount of volatility over the next couple of years while this works itself out. Wouldn't be surprised a bit if crude retraces back to the upper 50's before spring. And I'm ok betting against the herd. When too many agree, the price goes up!

 

[usedcarguy]

@usedcarguy

I asked my oil friend about your stance...

lol
dude they say that every time
oil producers love to produce oil
there will be a glut again in a couple of years
"oh, we're really going to tighten our belts this time"
big oil companies are going to buy up the small independents acreage and drill like 10 mile laterals
I would rather put money on $40 oil in 3 years than $100 oil for a prolonged time

Note that I never stated oil would sit at $100 for a prolonged time. I don't think $100 is going to be the new normal. I think it's what's going to happen in the event of the impending supply squeeze. And getting back to my investment thesis, OXY should hit $70-100 in 3-5 years even with oil in the $60-70 range.

$70 oil by summer was inconceivable 8 months ago, yet here we are.

 

[frackincygy]

My buys/adds in last 30 days (if anyone cares):
$TGTX
$QS (small spec stake)
$SNOW (bought when techs were 'micro-crashing' in mid-May)
$POSH
$THCB (really like this SPAC moving forward)
$OMER
$AVXL (pre-BIIB 'sympathy' spike)
$VKTX (pretty consistently buying when it's in the mid $5's and sell at least some when it pops over $10 - like their potential for NASH, even if they are a little bit behind in the 'race" to first on the market)
$VYGR (small spec stake in small spec biotech)
$AMBA (miniscule spec stake - missed out on $AMD ~5 years ago, and $AMC more recently - $AMB_ has got to be next right, RIGHT?)
$AXON (adding to my $TASR position - $10B is tiny for what this could be in 5-10 years time IMO)
$SKWKS (have been buying one share monthly/bi-monthly for the last 6 months or so, think this could be a big winner of 'smart auto'/'5G')
$AVGO (3% divi on a semi producer)

Dig it, rip it, take it all with a huge grain of salt - I'm just a junkie who likes to follow the markets, not an expert by any stretch.

 

[Gunnerclone]

My buys/adds in last 30 days (if anyone cares):
$TGTX
$QS (small spec stake)
$SNOW (bought when techs were 'micro-crashing' in mid-May)
$POSH
$THCB (really like this SPAC moving forward)
$OMER
$AVXL (pre-BIIB 'sympathy' spike)
$VKTX (pretty consistently buying when it's in the mid $5's and sell at least some when it pops over $10 - like their potential for NASH, even if they are a little bit behind in the 'race" to first on the market)
$VYGR (small spec stake in small spec biotech)
$AMBA (miniscule spec stake - missed out on $AMD ~5 years ago, and $AMC more recently - $AMB_ has got to be next right, RIGHT?)
$AXON (adding to my $TASR position - $10B is tiny for what this could be in 5-10 years time IMO)
$SKWKS (have been buying one share monthly/bi-monthly for the last 6 months or so, think this could be a big winner of 'smart auto'/'5G')
$AVGO (3% divi on a semi producer)

Dig it, rip it, take it all with a huge grain of salt - I'm just a junkie who likes to follow the markets, not an expert by any stretch.

Probably doing better than my junk portfolio.

 

[SCNCY]

My buys/adds in last 30 days (if anyone cares):
$TGTX
$QS (small spec stake)
$SNOW (bought when techs were 'micro-crashing' in mid-May)
$POSH
$THCB (really like this SPAC moving forward)
$OMER
$AVXL (pre-BIIB 'sympathy' spike)
$VKTX (pretty consistently buying when it's in the mid $5's and sell at least some when it pops over $10 - like their potential for NASH, even if they are a little bit behind in the 'race" to first on the market)
$VYGR (small spec stake in small spec biotech)
$AMBA (miniscule spec stake - missed out on $AMD ~5 years ago, and $AMC more recently - $AMB_ has got to be next right, RIGHT?)
$AXON (adding to my $TASR position - $10B is tiny for what this could be in 5-10 years time IMO)
$SKWKS (have been buying one share monthly/bi-monthly for the last 6 months or so, think this could be a big winner of 'smart auto'/'5G')
$AVGO (3% divi on a semi producer)

Dig it, rip it, take it all with a huge grain of salt - I'm just a junkie who likes to follow the markets, not an expert by any stretch.

What's the story on THCB?