The Effects of $80 Oil and Beyond on ARD Share Price
You have no doubt heard in the media many times about $100 oil. In the U.S. government Shockwave Study it was determined that a 4% decline in worldwide oil production will lead to crude oil prices rising to over $161 per barrel. (Currently Iran controls 4% of worldwide production.) Steven Leeb has talked about $200 oil. Matthew Simmons has even mentioned oil prices far beyond $200 a barrel.
Triple digit oil prices aside, $80 oil would generate MASSIVE earnings for ARD. Consequently the share price would soar. Keep in mind that $80 oil is a drop in the bucket compared to projections of $161 to $200 oil or even higher. $80 a barrel is cheap. I'm afraid that even $80 oil will not be enough to sufficiently kill demand even in an economic slowdown. Factor in the crisis in the Middle East and God only knows how high the prices go. Clearly ARD has is well positioned to earn $4.25 per share in 2007 with $80 oil. $80 oil could ultimately end up being a low projection for the year. In any case, sleep well at night knowing how valuable your ARD shares really are. The last couple days we have seen the Dow and Nasdaq sell off significantly. When oil continues to rise and other sectors continue to sell off due to declining earnings and expectations investors (both Wallstreet and individual investors) will be looking to recover their losses by investing in oil stocks with superior fundamentals and growth such as ARD. When the herd finally realizes the value, earnings power and growth of ARD they will push valuations to levels you never dreamed possible. Many of you may remember the valuations on internet stocks in the late 1990s. Many internet and tech stocks had triple digit PE multiples. There were also many internet stocks that were losing money. These stocks were valued based on price to sales ratios (P/S.) Some of those P/S ratios were also triple digit.As long as humans are investing in stocks you will continue to see panic buying and selling. At some point we will see investors panic buy quality stocks like ARD. Don't be surprised if you see ARD valued like the internet and tech stocks of the late 1990s. The only difference is that ARD has MASSIVE earnings power(unlike a large number of internet stocks that were losing money with triple digit p/s ratios.) Put a MASSIVE earnings multiple on MASSIVE earnings and you have MASSIVE share price. The money to be made in oil stocks such as ARD will eclipse even that of the highest flyers during the internet boom of the late 1990s.
You have no doubt heard in the media many times about $100 oil. In the U.S. government Shockwave Study it was determined that a 4% decline in worldwide oil production will lead to crude oil prices rising to over $161 per barrel. (Currently Iran controls 4% of worldwide production.) Steven Leeb has talked about $200 oil. Matthew Simmons has even mentioned oil prices far beyond $200 a barrel.
Triple digit oil prices aside, $80 oil would generate MASSIVE earnings for ARD. Consequently the share price would soar. Keep in mind that $80 oil is a drop in the bucket compared to projections of $161 to $200 oil or even higher. $80 a barrel is cheap. I'm afraid that even $80 oil will not be enough to sufficiently kill demand even in an economic slowdown. Factor in the crisis in the Middle East and God only knows how high the prices go. Clearly ARD has is well positioned to earn $4.25 per share in 2007 with $80 oil. $80 oil could ultimately end up being a low projection for the year. In any case, sleep well at night knowing how valuable your ARD shares really are. The last couple days we have seen the Dow and Nasdaq sell off significantly. When oil continues to rise and other sectors continue to sell off due to declining earnings and expectations investors (both Wallstreet and individual investors) will be looking to recover their losses by investing in oil stocks with superior fundamentals and growth such as ARD. When the herd finally realizes the value, earnings power and growth of ARD they will push valuations to levels you never dreamed possible. Many of you may remember the valuations on internet stocks in the late 1990s. Many internet and tech stocks had triple digit PE multiples. There were also many internet stocks that were losing money. These stocks were valued based on price to sales ratios (P/S.) Some of those P/S ratios were also triple digit.As long as humans are investing in stocks you will continue to see panic buying and selling. At some point we will see investors panic buy quality stocks like ARD. Don't be surprised if you see ARD valued like the internet and tech stocks of the late 1990s. The only difference is that ARD has MASSIVE earnings power(unlike a large number of internet stocks that were losing money with triple digit p/s ratios.) Put a MASSIVE earnings multiple on MASSIVE earnings and you have MASSIVE share price. The money to be made in oil stocks such as ARD will eclipse even that of the highest flyers during the internet boom of the late 1990s.
posted by -Aztec- at 3:06 PM
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