Royal Dutch Shell Shares

Glen_Clark

Thanks for the reply. The PE you quote of 21.29 sounds a lot more believable than the 6.71 quoted on Google. ( I looked on the Financial Times website but it doesn't give their PE.)

Reaper

Glen_Clark wrote: »

Thanks for the reply. The PE you quote of 21.29 sounds a lot more believable than the 6.71 quoted on Google. ( I looked on the Financial Times website but it doesn't give their PE.)

I disagree. A 21 P/E is wildly out of line with everybody elses figures. I would ignore it. Digitial Look says 7.7 for 2012, Bloomberg says 7.8, and Yahoo similar. Forecast figures for 2013 will vary but they are all still in the same ballpark.

cloud_dog

Reaper wrote: »

I disagree. A 21 P/E is wildly out of line with everybody elses figures. I would ignore it. Digitial Look says 7.7 for 2012, Bloomberg says 7.8, and Yahoo similar. Forecast figures for 2013 will vary but they are all still in the same ballpark.

Sabre's image is from iii and I don't think iii include RSDA shares in the calculation for RSDB (and vice versa for RSDA)

Glen_Clark

Guess that leaves me back where I started?
Why is RDSB so cheap :think:

Reaper

Glen_Clark wrote: »

Guess that leaves me back where I started?
Why is RDSB so cheap :think:

Mostly because demand for oil drops during global recessions plus the US gas fracking is lowering gas prices. More reasons from Motley Fool:

Shell has its problems. The oil price is volatile and new sources such as oil sands are expensive to extract. Gas prices have plummeted thanks to US shale discoveries, hitting its struggling US upstream business. Brokers have lost their enthusiasm. UBS recently downgraded Shell to 'neutral', blaming a lack of near-term momentum, and held its target price at £23.

But note this is an extract from an article that goes on to say the writer has and will continue to hold Shell shares. I do too and and am likely to buy more.

cloud_dog

Glen_Clark wrote: »

Why is RDSB so cheap :think:

Hi

Not sure why/where you get the 'so cheap' from?

If you're going on the PEs then some are just inaccurate (possibly due to the share structure causing complications).

If you just look at the SP then I'm not sure they are 'cheap', insofar as they are nearer the top end of their range and possibly looking to bottom lower down - don't quote me on this as I don't actually know what I'm talking about

As with most stocks the SP is a reflection of what has been achieved and what is being promised. With resource based stocks there is also a lot of focus on how quickly their reserves are diminishing, at what rate are they being replaced, is the price they are paying to replace the reserves reasonable, is the price to extract increasing etc, etc; all of which affects the bottom line.

As a general comment, Shell made a decision to get more heavily involved in gas which long-term I think will serve it well but at the moment gas is relatively cheap and new supplies are being found. And, as we know the market is only interested in what they are doing now and for shell next quarter.

sabretoothtigger

Woodford says these major oil companies have a problem of declining reserves.
So yes they have oil and make profits and these dividends are covered but the cost to reacquire what they use is rising is faster then the price at which they can sell.

I would go off the last quarters earnings to work out a PE for myself vs sharebase. I expect BP is cheaper anyhow but has that court case


Is Xcite cheaper then either, Im bad at doing this maths of reserves priced into share price. Its much quicker to look at the share graph for trends

Putting on my mystic meg outfit I see Shell graph has broken its rough uptrend of many years. Downside target to note is 2026 and upside 2300 could mark likely 'normal' boundaries until it establishes any new regular progress

cloud_dog

The chart shows one of those symmetrical trinangles which indicates indecision in the market (could go up or down) or maybe a continuation of the overall trend after some consolidation.

As with a lot of charting it will only be confirmed after the event - hey ho.

Glen_Clark

Article in the FT saying if all Governments stick to their agreements on carbon emissions (don't laugh) then most of these fossil fuels reserves will have to be left in the ground.
The more I research, the more undecided I get:huh::undecided

Glen_Clark

cloud_dog wrote: »

With resource based stocks there is also a lot of focus on how quickly their reserves are diminishing, .

Sure, but wouldn't that be already reflected in their PE ratio?
(A reduction of the valuation in their reserves reduce their earnings)