{"id":731,"date":"2010-07-13T15:33:33","date_gmt":"2010-07-13T19:33:33","guid":{"rendered":"http:\/\/www.credittrends.com\/blog\/?p=731"},"modified":"2010-08-28T18:12:49","modified_gmt":"2010-08-28T22:12:49","slug":"is-bp-a-sell","status":"publish","type":"post","link":"https:\/\/www.credittrends.com\/blog\/2010\/07\/13\/is-bp-a-sell\/","title":{"rendered":"Is BP a Sell?"},"content":{"rendered":"<p>Take a look again at fair value table for BP. Given a 9% cost of equity (which is quite generous given remaining risk) BP is fairly valued in the upper $30s. So unless you feel another energy shock is on the way, or another event that is going to propel energy prices higher near-term, allowing for a major boost to free cash flow on similar output, I would advise investors sell their shares in BP for other investments offering greater value with lower risk (cost of capital).<\/p>\n<p><a href=\"http:\/\/www.credittrends.com\/blog\/wp-content\/uploads\/2010\/07\/BP-NPV-07-13-2010.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-775 lazyload\" title=\"BP NPV - 07-13-2010\" data-src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/uploads\/2010\/07\/BP-NPV-07-13-2010-151x300.jpg\" alt=\"\" width=\"151\" height=\"300\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 151px; --smush-placeholder-aspect-ratio: 151\/300;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-775\" title=\"BP NPV - 07-13-2010\" src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/uploads\/2010\/07\/BP-NPV-07-13-2010-151x300.jpg\" alt=\"\" width=\"151\" height=\"300\" \/><\/noscript><\/a><\/p>\n<p>Even if a halt to the spill forces share higher, its not worth the risk and would be unjustified given the estimated free cash flows. So, unless free cash flow improves dramatically, not a likely event near-term, investors will be better rewarded elsewhere.<\/p>\n<p>See related articles:<\/p>\n<ul>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/07\/15\/even-under-the-most-glorious-scenario-bp-only-slightly-undervalued\/\">Even Under The Most Glorious Scenario BP Only Slightly Undervalued<\/a><\/li>\n<\/ul>\n<p>Disclosure: No positions<\/p>\n<p>Kenneth S. Hackel, C.F.A.<br \/>\nPresident<br \/>\nCT Capital LLC<\/p>\n<p><a href=\"http:\/\/www.credittrends.com\">www.credittrends.com<\/a><\/p>\n<p>BP has risk and should not wish to be considered by certain investors-consult your investment professional.<\/p>\n<p>Investors and potential investors should not rely on any information contained herein or communicated by any means to replace consultations with qualified investment professionals to meet their individual investment needs.\u00a0 The materials contained herein are for general purposes only.\u00a0 They do not have regard to the specific investment objectives, financial situation or risk tolerance of individual or corporate investors.\u00a0 Investors should consult with a financial professional prior to making any investment decision or investing in any of the firm\u2019s products.\u00a0 CT Capital LLC, its employees, or any associated individual, is not responsible for any investment decisions the recipient of these materials may make with respect to any investment.\u00a0 Data contained herein is gathered from sources believed to be correct and reliable but assume no liability for the accuracy or validity of any material whether written or verbally communicated.\u00a0 Nothing in this presentation should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or investment by CT Capital LLC, its directors, officers, principals, employees, agent, affiliates, or any third party.<\/p>\n<p>No employees or clients of CT Capital LLC \u00a0or <a href=\"http:\/\/www.credittrends\/\">credittrends<\/a> own a position in BP, nor was CT Capital or credittrends paid for preparing this report<strong>.<\/strong><\/p>\n<p class=\"facebook\"><a href=\"http:\/\/www.facebook.com\/share.php?u=https:\/\/www.credittrends.com\/blog\/2010\/07\/13\/is-bp-a-sell\/\" target=\"_blank\" title=\"Share on Facebook\">Share on Facebook<\/a><\/p><div class=\"tweetthis\" style=\"text-align:left;\"><p> <a class=\"tt\" href=\"http:\/\/twitter.com\/home\/?status=Is+BP+a+Sell%3F+https%3A%2F%2Fwww.credittrends.com%2Fblog%2F%3Fp%3D731\" title=\"Post to Twitter\"><img decoding=\"async\" class=\"nothumb lazyload\" data-src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/plugins\/tweet-this\/icons\/en\/twitter\/tt-twitter.png\" alt=\"Post to Twitter\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" \/><noscript><img decoding=\"async\" class=\"nothumb\" src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/plugins\/tweet-this\/icons\/en\/twitter\/tt-twitter.png\" alt=\"Post to Twitter\" \/><\/noscript><\/a> <a class=\"tt\" href=\"http:\/\/twitter.com\/home\/?status=Is+BP+a+Sell%3F+https%3A%2F%2Fwww.credittrends.com%2Fblog%2F%3Fp%3D731\" title=\"Post to Twitter\">Tweet This Post<\/a><\/p><\/div><!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Take a look again at fair value table for BP. Given a 9% cost of equity (which is quite generous given remaining risk) BP is fairly valued in the upper $30s. So unless you feel another energy shock is on the way, or another event that is going to propel energy prices higher near-term, allowing [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n<p class=\"facebook\"><a href=\"http:\/\/www.facebook.com\/share.php?u=https:\/\/www.credittrends.com\/blog\/2010\/07\/13\/is-bp-a-sell\/\" target=\"_blank\" title=\"Share on Facebook\">Share on Facebook<\/a><\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[57],"class_list":["post-731","post","type-post","status-publish","format-standard","hentry","category-general","tag-bp"],"_links":{"self":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/731","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/comments?post=731"}],"version-history":[{"count":6,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/731\/revisions"}],"predecessor-version":[{"id":1732,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/731\/revisions\/1732"}],"wp:attachment":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/media?parent=731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/categories?post=731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/tags?post=731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}