Royal Dutch Shell

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arbusers
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Royal Dutch Shell
« on: March 22, 2020, 12:52:55 PM »

I would like to bring at your attention the stock of Royal Dutch Shell, commonly known as Shell. This is the largest European company and the 9th biggest globally. It is listed in LSE, NYSE and Euronext Amsterdam. Graphs and prices that you see in this post are those of Euronext.

I m watching the behavior of the share price for some time now. The price is collapsed on a bigger scale compared to other Blue Chips power brands because there are 3 negative factors aligned at the same time.
1st. The Coronavirus. This is a negative factor for all other sectors of the economy as well but it seems to me that wrong political decisions to combat the virus, taken from the UK and the Netherlands created an additional burden for Shell. Notice, Shell is a British-Dutch company.
2nd. The global recession that was hiding in the corner for some time now, waiting for the fuse to fire. This is a negative factor for all other sectors of the economy too.
3rd. The oil price war between Russia and Saudi Arabia and the subsequently collapsed prices. This factor is a boost for almost all other sectors of the economy, but it is an additional burden for energy companies on top of Coronavirus and the recession.
I am highlighting the fact that energy companies are facing 3 negative factors, while all other sectors are dealing with just 2.

Now I m attaching the stock price graph and relevant conclusions.

 [ You are not allowed to view attachments ]

Today’s price is a 25 year low. We need to go back to 1995 to see the price at these levels again.
I m noticing high volumes these last days, much higher than volumes seen during the 2008 global crisis. This leads to the conclusion that some stronger hands are getting in.
There are no Fibonacci analogies. At least, I am not able to find any.
Dividend performance at 14.23% and P/E at 6.46. For those who can read the numbers, these figures are simply extremely rare. Of course, the 3 aligned negative factors mentioned before, will have a powerful impact on these figures and they will be corrected soon.

Now, why do I think it worths buying this stock?

1. The Coronavirus will be defeated. We have seen many viruses throughout human history and all of them with absolutely no exception were defeated by mankind. All hands are on decks now throughout the planet and it is a matter of time until we combat this virus too, even though we should expect more casualties.
2. Recessions and depressions come and go. There is no question about it, we will continue to drive our cars, fly our planes and need heating for winter. Life will continue one way or another. The collapse in energy demand is something temporary, and sooner or later the market will need more energy when we start getting out of the recession.
3. The oil price war between Russia and Saudi Arabia will finish at some point. It is obvious that Saudi Arabia is capable to export oil with profit even in teen prices. Russia is not, because mining is more expensive in Russia than Saudi Arabia. But that doesn’t mean the Arabs will win the war. The reason is that low energy prices are damaging the US. The US invested trillions of USD in shale gas and will not allow the Saudi’s to kill this multi-trillion investment. You might ask, how could the US persuade the Saudi’s to let prices go higher. The answer is called ‘’The Quincy Agreement’’. According to this agreement, the U.S. is providing Saudi Arabia military security and assistance, training, and above all the preservation of the Monarchy, in exchange for secure access to supplies of oil. In a nutshell, the US will kindly remind the Saudi’s that prices have to go up when the US want’s to do so…or else. I believe the same happened back in 2016. Notice, that Trump’s first trip abroad right after his inauguration, was to Saudi Arabia, and not Israel, UK, or Canada as some would expect.

For all these reasons, I believe it worths it to buy some Shell stocks now. Please notice, the exposure should be limited as this one in a generation ordeal has a bumpy road, but a well-known destination. Firepower should be available at any point, as we don’t know when it is needed once again. The general idea behind my thoughts is to add this stock in a portfolio that will perform for years to come. This is not a short term trade.
The reason why I select Shell now and not any other company is because of the unique 3 negative factors that were aligned simultaneously. When 1 of these factors is removed, Shell might payback, while other companies will not. This gives us more time to examine other companies too.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.

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ISIN
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Re: Royal Dutch Shell
« Reply #1 on: March 22, 2020, 02:57:42 PM »

I agree with the buy recommendiation.
However I recommend following this guy:
https://twitter.com/anasalhajji
Obviously he might be biased but he has lots of good inisghts. He went on to say that game theory suggests Saudis won't back down any time soon.

Just a sidenote, I really like that there is a blooming stock/market talk in these forums. Much better opportunities this time compared to sports betting. Fortunes can be made these days by just buying and holding some blue chip stocks (the whole Energy space in the US is at absurdly low valuations). I also recommend looking into $ET.
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arbusers
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Re: Royal Dutch Shell
« Reply #2 on: March 22, 2020, 08:45:45 PM »

For all these reasons, I believe it worths it to buy some Shell stocks now. Please notice, the exposure should be limited as this one in a generation ordeal has a bumpy road, but a well-known destination. Firepower should be available at any point, as we don’t know when it is needed once again. The general idea behind my thoughts is to add this stock in a portfolio that will perform for years to come. This is not a short term trade.

I had a couple of Skype discussions with our members. I would like to stress the above quote as the most important part of my analysis. Also, notice. Further analysis of a number of equities will be presented in our forum in the coming period. These equities will form a quality portfolio that will overperform in the next years. Please notice, these are not short term trades.
Thank you.
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DPG
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Re: Royal Dutch Shell
« Reply #3 on: March 22, 2020, 08:54:10 PM »


Yes Royal Dutch Shell is bound to recover to an extent as they are a huge company and can take the short term impact of the virus.

Which platform do all you guys use to trade shares?

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CharlieSheen99
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Re: Royal Dutch Shell
« Reply #4 on: March 22, 2020, 09:19:32 PM »

Yes, which platform do u use guys?
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geetz
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Re: Royal Dutch Shell
« Reply #5 on: March 22, 2020, 09:50:02 PM »


Yes Royal Dutch Shell is bound to recover to an extent as they are a huge company and can take the short term impact of the virus.

Which platform do all you guys use to trade shares?

Personally, I use Interactive Brokers.
There are many brokers to choose from, it all depends on factors like your location, instruments you are looking for, fees, markets etc.
Talking about IB can't say a bad word about them, none significant issues in a while. Might be confusing for beginners, but you get used to it quickly.
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Alfa1234
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Re: Royal Dutch Shell
« Reply #6 on: March 22, 2020, 09:56:02 PM »

Flatex here.  No transaction fees which is great but I think they are only available in a few countries.
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arbusers
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Re: Royal Dutch Shell
« Reply #7 on: March 23, 2020, 02:30:56 AM »

I m wondering, are you able to receive your dividends in platforms like these? Because dividends have an important role to play.
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Alfa1234
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Re: Royal Dutch Shell
« Reply #8 on: March 23, 2020, 09:04:43 AM »

Yep, they pay dividends no problem.  You just have to take care of any taxes (if any apply) yourself.

Just got some Royal Shell shares at 11.44, thanks.  :D
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Maydschi
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Re: Royal Dutch Shell
« Reply #9 on: March 23, 2020, 09:42:19 AM »

Flatex of course pay dividends. Why do you have to take care of taxes? In Austria, at least, they are deducting any applicable taxes directly from your balance.
« Last Edit: March 23, 2020, 10:13:59 AM by Maydschi » Logged
Alfa1234
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Re: Royal Dutch Shell
« Reply #10 on: March 23, 2020, 11:10:18 AM »

Flatex of course pay dividends. Why do you have to take care of taxes? In Austria, at least, they are deducting any applicable taxes directly from your balance.

They don't do it automatically for my country yet, probably because they have only just started offering their services here.  It's no big deal though, pretty easy calculation.
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Alfa1234
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Re: Royal Dutch Shell
« Reply #11 on: March 23, 2020, 12:24:22 PM »

Shell is rallying today, up 8.2% from where I bought it.  Great pick so far, definitely long term.  ;)
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ProHat
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Re: Royal Dutch Shell
« Reply #12 on: March 23, 2020, 01:33:25 PM »

Hi guys ,

what's your opinion about eToro ? I invested in Royal Dutch Shell  through their platform  just a while ago.
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arbusers
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Re: Royal Dutch Shell
« Reply #13 on: March 25, 2020, 11:17:51 AM »

I m coming back with another memo on Royal Dutch Shell.

The volatility that we are witnessing is something unseen in the history of stock markets. This ordeal combines 2 unknown factors. The 1st is the market it's self. The 2nd is the Corona virus and how it influences our lives.

According to what I see, the risks are getting greater.
1st, the way the US and a number of other countries are handling the situation is not giving confidence.
2nd, the way our life is changing with quarantines is something that can’t be calculated with good confidence.

We enjoyed some nice profits, but for now, I believe you should sell your shares in the company.

We are in a winner's position. We might buy them later at lower prices, or we will enjoy our profits.

I might come back later with more justification and analysis.

Thank you.
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Alfa1234
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Re: Royal Dutch Shell
« Reply #14 on: March 25, 2020, 12:04:54 PM »

They announced yesterday they are planning to cut 9 billion in costs and keep the dividend.  That means the dividend ROI is huge (14%+) at the price we got in.  Is there any reason you believe the other fundamentals for this stock have changed?  I was planning on keeping it for several years.
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