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  • AvatarJosh Louik
    Participant
    Post count: 15

    Happy New Year Sean. I know this isn’t one of our stocks but really curious about your analysis of this company as I appreciate your wisdom. I realize they have a tremendous debt burden with the Andarco purchase and the obligation to WB for his preferred positions and oil prices haven’t helped, but what is your opinion on how this plays out for OXY?

    Sean HymanSean Hyman
    Keymaster
    Post count: 5643

    Happy New Year to you as well.

    You didn’t state if you owned it or not. If you don’t own it, there’s no way I could suggest getting into it when its debt is several times that of its market cap. Yes, Warren Buffett is in it but he’s got a special situation over regular shareholders, correct.

    I have no idea if OXY will be able to dig itself out of its high-debt hole that its dug for itself. Obviously, as oil heads higher, that can aid their chances of success. But it’s why we don’t get into high-debt companies. Now, we have had a few that have become higher debt companies and we still did fine. But we don’t enter them if they’re high debt because high debt = higher risks. https://finance.yahoo.com/quote/OXY/key-statistics?p=OXY

    The only positives that I can find are that the selling volume has died down and some speculative buying resumed due to oil’s rally. Could it make it back up to its 200-week moving average region? Maybe.

    It’s why, in buying very solid companies, we can have clarity and confidence. It’s one of our edges. But OXY is not solid. The question is if it can survivee, and no one knows that ahead of time.

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    AvatarJosh Louik
    Participant
    Post count: 15

    Thank you so much for the info. Unfortunately I do own the stock (pre subscriber move :)). I am in it around 34 and just wondering if I ride it out or cut and run. My thoughts are the same wondering if they can dig out. I am trying to gain wisdom on how best to continue to realign my portfolio going forward. Meaning sorting out all the old positions and transition into your recommendations with them. It’s easy to do with new investment funds but not so easy with old positions. Any wisdom and insight on best ways to manage is welcomed

    Sean HymanSean Hyman
    Moderator
    Post count: 3257

    With oil in an uptrend, it’s worth seeing how much it may recover for you.

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