Author Topic: Need advice on an oil stock (SD)  (Read 5552 times)

DollarBill

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Need advice on an oil stock (SD)
« on: January 08, 2015, 11:18:08 AM »
I currently hold some SandRidge stock (SD). I bought at $3.73 and it's now down around $1.36 a share. With oil prices dropping and a class action lawsuit has been filed against SD. Should I cut my losses now or ride it out?

It's only worth about $3500 currently so it's not that devastating if it disappeared. I can't even get added to the lawsuit because I bought on Nov 5th, the cut off was Nov 4th (bahhahaha).

I'm kicking myself in the ass but I can still laugh about it and chalk it up as a lesson.   

mxt0133

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Re: Need advice on an oil stock (SD)
« Reply #1 on: January 08, 2015, 11:26:32 AM »
I would be inclined to sell it if you have any offsetting capital gains.  When you bought it I assumed that you had a exit strategy, fundamentals, price points, ect. that would signal if your assumptions were correct or not.  Are you assumptions still correct?  What was your time horizon for those assumptions to pan out?  If they didn't pan out, then I would sell and move on to your next trade.

BarkyardBQ

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Re: Need advice on an oil stock (SD)
« Reply #2 on: January 08, 2015, 12:33:50 PM »
Assuming you bought this because of it's dividend yield you should probably get out of it. The stock has been declining for years, and it would be extremely hopeful emotions to think it would come back for you. Dividend payouts also devalue the price of the stock, its of threads on this... http://forum.mrmoneymustache.com/investor-alley/anyone-else-only-buying-dividend-stocks/

Sell it, harvest the losses and stick it into index funds so you can recover the loss in a few years. Or my favorite speculative single stock holding is BRK-B which has a habit of doubling in a relatively short time. No dividends though, just excellent capital gains.
« Last Edit: January 08, 2015, 12:39:21 PM by zdravé »

agent13x

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Re: Need advice on an oil stock (SD)
« Reply #3 on: January 08, 2015, 12:54:11 PM »
I never would have bought an individual stock in the first place. Regardless, perhaps consider riding it out. Oil prices will go back up. No need to turn an unrealized loss into a realized loss.

I have not looked at the details of the individual stock you mention, this is just generic advice.

BarkyardBQ

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Re: Need advice on an oil stock (SD)
« Reply #4 on: January 08, 2015, 01:05:38 PM »
I never would have bought an individual stock in the first place. Regardless, perhaps consider riding it out. Oil prices will go back up. No need to turn an unrealized loss into a realized loss.

I have not looked at the details of the individual stock you mention, this is just generic advice.

This particular stock has been going down for years, pretty much after it's IPO, it has nothing to do with recent oil prices.

http://finance.yahoo.com/echarts?s=SDT#%7B%22range%22%3A%225y%22%2C%22scale%22%3A%22linear%22%7D
http://finance.yahoo.com/echarts?s=SDR#%7B%22range%22%3A%225y%22%2C%22scale%22%3A%22linear%22%7D
« Last Edit: January 08, 2015, 01:14:06 PM by zdravé »

DollarBill

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Re: Need advice on an oil stock (SD)
« Reply #5 on: January 08, 2015, 01:23:32 PM »
The stock is just SD not one of the trust in a certain area. From what I read the trusts are normally a bad call because it does dwindle unless there is new drilling in that area.
http://finance.yahoo.com/echarts?s=SD+Interactive#%7B%22range%22%3A%2210y%22%2C%22scale%22%3A%22linear%22%7D
I'll read through that other thread thanks!

BarkyardBQ

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Re: Need advice on an oil stock (SD)
« Reply #6 on: January 08, 2015, 01:37:14 PM »
Did not know there was a stock, just knew about the trusts. I did research the trusts awhile ago cause it comes up on a lot of 'dividend' charts, but immediately looked like a losing bet. Then found all the arguments here for capital gains vs dividends anyway.

UnleashHell

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Re: Need advice on an oil stock (SD)
« Reply #7 on: January 09, 2015, 04:12:47 AM »
why did you buy SD?
do you know what the class action lawsuit is about? seen anything else like this before?
why are you holding it?

If it was a punt in the market then you need to consider selling. If you bought it because you'd studied the company then what has changed to make you challenge your analysis?

Lowerbills

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Re: Need advice on an oil stock (SD)
« Reply #8 on: January 09, 2015, 08:22:05 AM »

I trade equities and am somewhat familiar with this stock and how it has traded in the past... But I don't have a crystal ball or claim to know what's going on with SD.

If you look at a lot of the small to mid-size oil & gas stocks right now, they are trading similar to how some of the smaller regional banks and lenders traded in 2008.  Once the price of the common goes below about $2, the prospects for a turnaround in the equity is pretty bleak.  Some will likely go BK, while some might be acquired by larger companies with stable balance sheets... I do know they have a ton of debt... Anyone's guess what the future holds for them.  I remember seeing Ford Motor (F) at $2 thinking it had to worthless, GM was filing BK...   

Have you considered selling your position to realize the loss and buying the stock back 30 days later if you REALLY do want to own SD?  Just an idea. 

There will be a good buying opportunity in oil & gas stocks eventually... Just not sure when.  And not to be a dick, but right now you're down ~ 63% in the position.  In the future, have a plan in place if you are picking individual stocks, to prevent you from sitting in a stock down this much...



Numbers Man

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Re: Need advice on an oil stock (SD)
« Reply #9 on: January 09, 2015, 08:42:24 AM »
I buy stocks for capital appreciation. With that said, if there's no solid story why the stock should go up, then I would be a seller of this stock.

innerscorecard

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Re: Need advice on an oil stock (SD)
« Reply #10 on: January 09, 2015, 08:46:15 AM »
This is why you don't buy stocks without a plan and without doing research. If you had no idea of what the stock should be worth in the first place, you'll have no idea whether to buy or sell. If you follow such a speculative path (and it's not even intelligent speculation, which people definitely have made money with, even if it's not something I like to do myself), you are guaranteed to lose money. It's like playing poker without knowing what the cards mean. It's pure lunacy.

DollarBill

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Re: Need advice on an oil stock (SD)
« Reply #11 on: January 09, 2015, 12:50:18 PM »
why did you buy SD?
do you know what the class action lawsuit is about? seen anything else like this before?
why are you holding it?

If it was a punt in the market then you need to consider selling. If you bought it because you'd studied the company then what has changed to make you challenge your analysis?

I'm just getting back into stocks. I use to get into it a lot more when I was married and made good money from it. For the last couple of years I spent getting my personal finances in order (Now rock solid, no debt). I will admit that it was a bit of a punt to get back into the market. I chose SD because I'm from Kansas and I knew SD was going crazy drilling new wells in lower KS in Harper County, Comanche County, Ford County, Gray County. I was unaware of the lawsuits because it happen the day before I bought. It's about SD not reporting statements correctly.

I sold it today so not a total loss. I'm going to start looking for mutual funds or ETF's. Do you guys have any good advice for research and/or any links to some old threads. I have about $50K to work with right now.

Thanks for the help!

BarkyardBQ

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soccerluvof4

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Re: Need advice on an oil stock (SD)
« Reply #13 on: January 10, 2015, 06:35:59 AM »
When thing are cheap i like to buy BUT there is risk with that as with any trade. Right now I feel Oil is low but could go much lower before going higher and I am confident it will. I also like being overweight energy so have started nibbling on VGENX in my Vanguard fund and XLE in my trading account. Seemingly everyone has a reason why one stock or another is a great deal and or will go up or down so at least this way i get a basket of what are considered to be better sustainable companies.

goodrookie

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Re: Need advice on an oil stock (SD)
« Reply #14 on: January 13, 2015, 02:56:35 AM »
to OP, cut your losses. Sell before the next QE.

UnleashHell

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Re: Need advice on an oil stock (SD)
« Reply #15 on: January 27, 2015, 10:46:31 AM »
20th of January would have been a good time to buy.


its heading back north. YE results will be iteresting. I wonder how much they spend on buying back shares. and how much and long they are hedged for with the oil sales.

Lowerbills

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Re: Need advice on an oil stock (SD)
« Reply #16 on: September 25, 2015, 09:27:00 AM »
Remembered this thread from earlier this year.

SD is currently trading at .28

DollarBill

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Re: Need advice on an oil stock (SD)
« Reply #17 on: September 28, 2015, 06:50:54 PM »
Remembered this thread from earlier this year.

SD is currently trading at .28
lol...time to double down ;-)

mrpercentage

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Re: Need advice on an oil stock (SD)
« Reply #18 on: September 29, 2015, 05:06:59 AM »
Better to be in XOM, CVX, or COP. Shell if you like riding right on the edge. All have potentially huge upsides once the smaller ones are choked out. I think they will start dropping like flies soon. Considering this is economic warfare the U.S. Government should step up and back oil with lower rate treasury bonds. Its not fair for an entire government like the Saudi Arabia to square of with U.S. corporations. Uncle Sam needs to step up and back his oil independence