Investing: Sasol

[mr_norris]

Hello!

It appears that Sasol has taken one hell of a beating lately, for a couple of reasons (not necessarily in order):

* Lake Charles project overruns
* CEO's getting the boot
* Moodys downgrade
* Oil price drop
* Class action against the execs

In the past year, we've seen the price go down from R470 to about R30 (LOL). Clearly they have a lot to do to get going, but the stock is now cheap (relative to what it was).

To those who are watching too, what are your thoughts? Worth the buy? There is obviously room to fall still, but if things recover, there is room for a lot of growth.

 

[Pegging]

Yeah buy some Steinhoff as well.

 

[Hamster]

To invest in Sasol you must be thinking that there is a good chance of recovery. Except for the oil price, what other indicators are there that this is a good buy?

I reckon the only people who'll buy Sasol are those thinking it is cheap and what goes down must surely go up and those that are aware of people who think this.

 

[mr_norris]

Yeah buy some Steinhoff as well.

LOL, well, you only live once right?

what other indicators are there that this is a good buy?

That has given me something to think about. I think I'll look into that.

 

[acidrain]

My thoughts is to wait for a bottom before considering an investment. It seems to still be going down.

 

[Pegging]

LOL, well, you only live once right?


That has given me something to think about. I think I'll look into that.

It’s on a P/E of 6.5 apparently.
Remember that the P is the last closing price, and that E for earnings is an old number from about 3 months before the last time they reported.

So don’t base your decision on a low P/E.
The next E may be a frikking low number.

 

[Hamster]

Sasol over 5 years.


Recent crash aside, hardly anything to get excited about unless they've been paying reasonable dividends?

 

[ArmatageShanks]

My thoughts is to wait for a bottom before considering an investment. It seems to still be going down.

To me it looks like its been going down for a year

 

[BTTB]

Many astute analysts have been punting Sasol all the way from R500 to around R200 recently just before the crash last Monday with the announcement from Saudi Arabia about slashing the oil price.
Can't be many oil producers making money at the moment.

Anglo American went to below R50 and then bounced, Kumba went to R20 and then bounced.
Resource stocks are hard to predict and terrible to be in if you are a holder like me watching your pension dwindle away. Eish.

Was thinking of adding a few more Sasol if it gets to R20, double down in other words. A gamble but hopefully will average my price upwards in anticipation of a recovery.

 

[mr_norris]

My thoughts is to wait for a bottom before considering an investment. It seems to still be going down.

That's what I am thinking, there is still room for a lot of loss, and things aren't looking so great yet.

Was thinking of adding a few more Sasol if it gets to R20, double down in other words.

I don't hold any direct shares, just through SATRIX 40 (I think). Otherwise I might do the same as you.

Sasol over 5 years.

Recent crash aside, hardly anything to get excited about unless they've been paying reasonable dividends?

Two things here. It was around R470 just under a year ago. If it ever gets back there, there is money to be made. Big if of course. And yes, they have been paying dividends.

 

[Pegging]

In your OP you mention they have 8 Billion in debt to pay off and have been downgraded to junk by Moody’s.
Then you have all the other kuk. So the chance of a dividend must be low.
There’s also rumors of a rights issue.

Their net asset value may be negative for all we know.

 

[Hamster]

Two things here. It was around R470 just under a year ago. If it ever gets back there, there is money to be made. Big if of course. And yes, they have been paying dividends.

You can try put lipstick on this pig all you want:

Latest news about Sasol Limited - MarketScreener

Sasol Limited: News, information and stories for Sasol Limited | Johannesburg S.E.: SOL | Johannesburg S.E.

www.marketscreener.com

They last paid dividends over a year ago.

To get back to R470 you need a 1400% growth

 

[Mista_Mobsta]

In your OP you mention they have 8 Billion in debt to pay off and have been downgraded to junk by Moody’s.
Then you have all the other kuk. So the chance of a dividend must be low.
There’s also rumors of a rights issue.

Their net asset value may be negative for all we know.

Sauce
https://www.businesslive.co.za/bd/c...stricken-sasol-may-need-to-hold-rights-issue/

 

[Pegging]

Sauce
https://www.businesslive.co.za/bd/c...stricken-sasol-may-need-to-hold-rights-issue/

Yep. Market cap of R33 billion and debt of R127 billion.

Sasol’s record share plunge on Monday, coming as the oil price slumped and just days after the company credit rating was cut to junk by Moody’s Investors Service, is raising concern among investors that it may need to hold a rights offer as it struggles with a debt burden of about $8bn (about R127.6bn).

 

[mr_norris]

They last paid dividends over a year ago.

To get back to R470 you need a 1400% growth

I missed that. But otherwise I am not disagreeing with you. I started this thread thinking it might be a good time to buy, but by now I've realise that it's not.

 

[BTTB]

At the current share price which dropped to a low of 2869 cents this morning, is Sasol still a Top 40 Company?
Top 40 ETF Trackers, Dividend Trackers too, would need to lighten up.

 

[BTTB]

Sauce Source
https://www.businesslive.co.za/bd/c...stricken-sasol-may-need-to-hold-rights-issue/

The big question for everyone would be, the price of such a rights issue.
Everyone waiting until Tuesday.

Latest SENS.

UPDATE ON SASOL’S CONFERENCE CALL

Sasol was scheduled to host a conference call on Tuesday, 10 March 2020, at
15:00 (SAST) in order to discuss the recent outcome of the periodic ratings review
by S&P Global and Moody’s.

Given the latest developments where oil prices have declined significantly and
increased market volatility, the conference call will be moved to Tuesday, 17
March 2020, at 15:00 (SAST). This allows more time to assess the impact of these
latest developments on the market and Sasol in particular.

Balance sheet protection remains a key priority. As communicated during the
interim financial results, we continue to actively manage the balance sheet and
several steps have already been taken to mitigate market volatility. This includes
our hedging programme to mitigate commodity price movements and exchange
rate exposures. We have hedged our US$/ZAR exchange rate and ethane
exposure, but oil price exposure is not hedged for the remainder of FY20.

 

[Hamster]

At the current share price which dropped to a low of 2869 cents this morning, is Sasol still a Top 40 Company?
Top 40 ETF Trackers, Dividend Trackers too, would need to lighten up.

Just in time for re-balancing end of this month

 

[Jehosefat]

At the current share price which dropped to a low of 2869 cents this morning, is Sasol still a Top 40 Company?
Top 40 ETF Trackers, Dividend Trackers too, would need to lighten up.

As far as I know, most of those ETFs/indices/trackers only rebalance quarterly to keep trading costs down. Not sure if something like this would cause them to rebalance sooner though.

 

[Tman*]

yes oil will go up again.

No that doesnt mean Sasol will