Sasol shares, or not?!





Page 1 of 8 1 2 3 4 5 6 7 8 LastLast
Results 1 to 20 of 155
  1. #1
    Join Date
    Feb 2012
    Location
    Secunda
    Age
    56
    Posts
    359
    Thanked: 128

    Default Sasol shares, or not?!

    With the share price the lowest in 10 years, what do the experts say?
    Buy, or not?

  2. #2
    Join Date
    Dec 2018
    Location
    Calitzdorp
    Posts
    29
    Thanked: 50

    Default Re: Sasol shares, or not?!

    Beware - there is a reason it is so "Cheap"

  3. The Following 2 Users Say Thank You to AfriqueDS For This Useful Post:


  4. #3
    Join Date
    Jun 2010
    Location
    Port Elizabeth
    Age
    35
    Posts
    5,670
    Thanked: 1381

    Default Re: Sasol shares, or not?!

    Buy low, sell high.
    Sent from my iPhone


  5. #4
    Join Date
    Aug 2011
    Location
    Cape Town
    Age
    36
    Posts
    84
    Thanked: 166

    Default Re: Sasol shares, or not?!

    I would wait.

    Sold mine at R190. things are going pear shaped.

    • Lots of Debt
    • LCCP cash flows will likely be less than initially though
    • Low chemical prices
    • Low oil pricing due to concerns on global economic growth


    There might be a rights issue coming if oil stays where it is now. They messed up the hedging strategy and now balance sheet risk is being priced in - that is why it is tanking I think.

    Might be a good entry when you think Long term, but long term they also have problems such as increased capex to comply with all the environmental issues and CO2 tax.
    I think there is more downside coming tough in the short term, When it turns around it does not matter if you missed the first 20 %.

    For the time being though- there is lots that can go wrong
    Last edited by Wilhelm_Bergbok; 2020/03/07 at 09:15 PM.

  6. The Following 4 Users Say Thank You to Wilhelm_Bergbok For This Useful Post:


  7. #5
    Join Date
    Jun 2014
    Location
    Cape Town Southern Suburbs
    Posts
    3,036
    Thanked: 1105

    Default Re: Sasol shares, or not?!

    What's happening with their massive US project that's like 3 times over budget and bleeding cash?

  8. #6
    Join Date
    Nov 2014
    Location
    Durban
    Age
    60
    Posts
    1,316
    Thanked: 1731

    Default Re: Sasol shares, or not?!

    Never try to catch falling knives. Remember the lowest any share can go is zero. Wait till the Lake Charles Project in the USA stop draining them dry too. Theyíve got some long yards to do to recover, you donít need to pick the bottom on this, just make good bucks out of the bit in the middle, youíll know when the recovery is well under way.
    Love your neighbour. Thatís about it, itíll be the world we want.

  9. The Following 2 Users Say Thank You to Gungets Tuft For This Useful Post:


  10. #7
    Join Date
    Oct 2013
    Location
    Centurion
    Age
    63
    Posts
    1,373
    Thanked: 484

    Default Re: Sasol shares, or not?!

    As said more can go wrong. Perhaps a small punt but not to bet the house. Keep powder dry to try and get some lower. Too much uncertainty with their Lake Charles project and oil still heading lower. Risk of global economy does not help either.

  11. The Following User Says Thank You to ekkekan For This Useful Post:


  12. #8
    Join Date
    Jan 2012
    Location
    Langs die rivier, op n berg
    Posts
    13,658
    Thanked: 2869

    Default Re: Sasol shares, or not?!

    Hulle is nou op n stryd om oorlewing. Maar hulle gaan nie. Sand loop uit.
    Gaan split in 3.
    Hulle gaan crash.
    Vrywaring: Niks wat ek hier kwyt raak moet hoegenaamd as feite beskou word nie.

  13. #9
    Join Date
    Apr 2014
    Location
    Roodepoort
    Age
    63
    Posts
    1,108
    Thanked: 3436

    Default Re: Sasol shares, or not?!

    My investment adviser even sold NOK (Norwegian Kronor) It is tied to oil price. He said nobody knows what happens with oil price. Use is going down and Opec (again) could not agree production cut. Sasol is not oil only. They are to chemicals but oil price has big impact. Maybe call it gambling to buy or not to buy.

    I leave these decisions to people I pay money
    Jouko
    ----------
    2003 Grand Cherokee 4.7l
    2012 Smart
    Never drive a normal car 8)

  14. #10
    Join Date
    Aug 2008
    Location
    Rangeview Krugersdorp
    Age
    70
    Posts
    6,422
    Thanked: 1204

    Default Re: Sasol shares, or not?!

    Sold yesterday......
    There is no task too simple for some people to complicate !



    Hyundai Getz 1.6 2010

  15. #11
    Join Date
    Mar 2008
    Location
    De Wildt
    Age
    57
    Posts
    37,001
    Thanked: 12962

    Default Re: Sasol shares, or not?!

    Telkom shares also down, for good reason.
    2012 Jeep Sahara Unlimited 3.6 V6
    Percivamus

  16. #12
    Join Date
    Apr 2014
    Location
    Roodepoort
    Age
    63
    Posts
    1,108
    Thanked: 3436

    Default Re: Sasol shares, or not?!

    In general SASOL is on big a cost cutting. Have been some time = contractors suffering. I did speak yesterday with one employee. There are products that are not selling now. This is one of those hidden consequences of Corona. Chemicals will be needed later but when?

    It would be time to do critical maintenance but bean counters say no. Money is there when the market is up but then plant must run. This is the "modern" way of doing things.
    Jouko
    ----------
    2003 Grand Cherokee 4.7l
    2012 Smart
    Never drive a normal car 8)

  17. #13
    Join Date
    Jan 2012
    Location
    Langs die rivier, op n berg
    Posts
    13,658
    Thanked: 2869

    Default Re: Sasol shares, or not?!

    Sasol is klaar op junk status. Van mense hoog op in sasol, daar is nie kans op herstel.

    Die algemene ou wat daar werk, het nie n idee hoe in die moeilikheid die plek is
    Vrywaring: Niks wat ek hier kwyt raak moet hoegenaamd as feite beskou word nie.

  18. #14
    Join Date
    Jan 2012
    Location
    Langs die rivier, op n berg
    Posts
    13,658
    Thanked: 2869

    Default Re: Sasol shares, or not?!

    Maar, dan is sasol se probleem self inflicted...
    Alles het begin direk nadat hulle n plek gekry het, en betaal het, om hul top verkoper te laat toets, en as oneffektief te laat verklaar.
    Basies vir hul kliente gesÍ, moet nie ons produk koop en gebruik nie....







    As hulle ons net gelos het om te 2SO
    Vrywaring: Niks wat ek hier kwyt raak moet hoegenaamd as feite beskou word nie.

  19. #15
    Join Date
    Feb 2018
    Location
    Pretoria
    Posts
    303
    Thanked: 965

    Default Re: Sasol shares, or not?!

    The current price earnings ratio is 23 I would not touch Sasol until it's around 5-6. Which means either the share price drops to around R40 or the earnings grow by 4x. The latter doesn't seem possible with the Saudis fighting with Russia and increasing output so oil prices will drop considerably in the short term. This share is not a buy at this level.

  20. #16
    Join Date
    Aug 2011
    Location
    Cape Town
    Age
    36
    Posts
    84
    Thanked: 166

    Default Re: Sasol shares, or not?!

    Quote Originally Posted by River Rat View Post
    The current price earnings ratio is 23 I would not touch Sasol until it's around 5-6. Which means either the share price drops to around R40 or the earnings grow by 4x. The latter doesn't seem possible with the Saudis fighting with Russia and increasing output so oil prices will drop considerably in the short term. This share is not a buy at this level.
    PE is probably not the right metric to look at for Sasol.
    None of the LCCP earnings are coming through yet, but they have the massive interest charge since construction is complete. Earnings are significantly less than they would be on a mid cycle basis and also when the Cracker is running. Which is why Sasol was close to R600 at some point.

    Earnings will be lower than initially though yes, bit the market is still forward looking which is why it has a high rating on a PE basis - even though it is the wrong metric.
    On an enterprise Valuation, things have actually not changed much. Problem is all the debt they now have which is why the price collapsed.

    But you are right - not a buy ( atleast according to me)
    Last edited by Wilhelm_Bergbok; 2020/03/08 at 09:08 AM.

  21. #17
    Join Date
    Feb 2012
    Location
    Chintsa East
    Age
    65
    Posts
    1,373
    Thanked: 463

    Default Re: Sasol shares, or not?!

    The market is a fickle animal, 30 years ago we bought and sold on the strength of a few graphs and indicators. Now there are hundreds plus the biggest of all is BEE and politicians.

    I am accumulating slowly as it falls, will never catch the low but in the end rand averaging will score.

    Sasol is a world class company it will recover. Thing to remember is that the market is a long term investment.
    2013 Disco 4 XS Lifted
    Toyota Yaris, Swambo's shopping basket
    Jeep Wrangler Sahara 2006 the worsies car for the beach(what a car!! )

  22. #18
    Join Date
    Feb 2018
    Location
    Pretoria
    Posts
    303
    Thanked: 965

    Default Re: Sasol shares, or not?!

    Quote Originally Posted by Wilhelm_Bergbok View Post
    PE is probably not the right metric to look at for Sasol.
    None of the LCCP earnings are coming through yet, but they have the massive interest charge since construction is complete. Earnings are significantly less than they would be on a mid cycle basis and also when the Cracker is running. Which is why Sasol was close to R600 at some point.

    Earnings will be lower than initially though yes, bit the market is still forward looking which is why it has a high rating on a PE basis - even though it is the wrong metric.
    On an enterprise Valuation, things have actually not changed much. Problem is all the debt they now have which is why the price collapsed.

    But you are right - not a buy ( atleast according to me)
    We each have our metrics when assessing a share and the trick is to stick to what works for you. We both arrived at the same conclusion from different assessments, for simplicity sake I use an income based assessment while yours is orientated to the balance sheet. Neither is necessarily wrong.

  23. The Following User Says Thank You to River Rat For This Useful Post:


  24. #19
    Join Date
    Aug 2011
    Location
    Cape Town
    Age
    36
    Posts
    84
    Thanked: 166

    Default Re: Sasol shares, or not?!

    Quote Originally Posted by River Rat View Post
    We each have our metrics when assessing a share and the trick is to stick to what works for you. We both arrived at the same conclusion from different assessments, for simplicity sake I use an income based assessment while yours is orientated to the balance sheet. Neither is necessarily wrong.
    Apologies if it sounded offensive - agree everybody has their own metrics.

    By "wrong" I mean not perfect. But no valuation metrics are, otherwise it would be as simple as calculating the metric and then your buy/sell call always works out. Which we know is not that simple.
    P/E normally works best when the actual cash generation is about the same as the earnings. For Something like Sasol which is very capex heavy the earnings quality is fairly poor. Cash generated are less than reported earnings. So if you think it is expensive on a P/E basis - it is even more expensive on a cash generation basis. So you are correct in that regard.

    PE normally works best when a business has good earnings quality (so cash generated is close to reported earnings) and the business is not very cyclical. So it works good for annuity type businesses.
    PE values are unreliable at the top/bottom of cycles since either the earnings are very depressed at that point so they look expensive - and ironically cheap at the top of the cycle. Maybe a bit like Sasol now

    Valuation metrics are more art than science. I struggle with these questions every day. You kind of have to know when to use which valuation metric and why/why not. And then ofcourse not step into the trap of using the metric that justifies your existing viewpoint.

    For something like Sasol currently, P/E, P/B, EV/EBITDA and EV/Sales might give you completely different answers.

    Well, guess we will know in a year or 2. I won't be surprised if Sasol halves or doubles in the next year. R160 today should we look back at this thread

  25. The Following User Says Thank You to Wilhelm_Bergbok For This Useful Post:


  26. #20
    Join Date
    Feb 2018
    Location
    Pretoria
    Posts
    303
    Thanked: 965

    Default Re: Sasol shares, or not?!

    Quote Originally Posted by Wilhelm_Bergbok View Post
    Apologies if it sounded offensive - agree everybody has their own metrics.

    By "wrong" I mean not perfect. But no valuation metrics are, otherwise it would be as simple as calculating the metric and then your buy/sell call always works out. Which we know is not that simple.
    P/E normally works best when the actual cash generation is about the same as the earnings. For Something like Sasol which is very capex heavy the earnings quality is fairly poor. Cash generated are less than reported earnings. So if you think it is expensive on a P/E basis - it is even more expensive on a cash generation basis. So you are correct in that regard.

    PE normally works best when a business has good earnings quality (so cash generated is close to reported earnings) and the business is not very cyclical. So it works good for annuity type businesses.
    PE values are unreliable at the top/bottom of cycles since either the earnings are very depressed at that point so they look expensive - and ironically cheap at the top of the cycle. Maybe a bit like Sasol now

    Valuation metrics are more art than science. I struggle with these questions every day. You kind of have to know when to use which valuation metric and why/why not. And then ofcourse not step into the trap of using the metric that justifies your existing viewpoint.

    For something like Sasol currently, P/E, P/B, EV/EBITDA and EV/Sales might give you completely different answers.

    Well, guess we will know in a year or 2. I won't be surprised if Sasol halves or doubles in the next year. R160 today should we look back at this thread
    No need to apologise I didn't see your post as a criticism at all. The reality is two different methodologies provide the same answer which hopefully helps the OP unless of course we are both wrong

Page 1 of 8 1 2 3 4 5 6 7 8 LastLast

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •