Pinned valuation:
I'm reposting my valuation for WDS as it didn't seem to stick. I don't see any reason to change my valuation of $32.64, It is a lot closer to it now closing today at $30.42 than it was at $24.01 when I first posted. I also did another valuation with the @Strawman ' s tool which gave me $30.17. That valuation (WDS was $26.48 then) is right at the bottom of the notes. While I am still bullish on WDS and comfortable with my valuation, I have rebalanced today. With all the capital growth WDS had ballooned to over 37% of my RL portfolio. Having just gone ex-Div I was happy to rebalance, restock cash and be able to go on the hunt for another winner. Previous valuations are below:
A little case for why I think WDS is still a value proposition moving forward considering today’s release of full year 2024 results.
Record production achieved in 2024 with 193.9 MMboe, with more production coming online with Sangomar, Scarborough, Trion, and Louisiana LNG.
Net profit up 115% YOY despite a fall in realised oil and gas prices. Unit cost of production down by 2%.
Higher production and lower unit cost of production combined with the potential for higher prices gives pretty good potential upside.
The 53 US cent dividend is worth about 0.835 AUD at today’s exchange rate, bringing the total for the year to AUD$1.86, a 7.73 percent return at (the current price when writing of) $24.01 before franking credits. PE is sitting below 10 and WDS share price has been well above its current malaise for the last couple of years.
I’ve attached my CMC value calculation below. I reckon $32.64 is a pretty conservative value for this company. As recently as September 2023 its price was over $38 per share.
Disclosure: This is one of my biggest holdings in RL and on SM.
WDS valuation
I thought I'd do a little update on this valuation since I've finally had some time to watch @Strawman 's basic valuation video and started playing around a bit with WDS figures. So I started with a revenue increase of 4% per year for 3 years giving me $23.844 Billion multiplied by a 20% NET profit margin (average over the last 4 years is over 25%) giving me $4.768 Billion. 1.989 billion shares outstanding gives me $2.51 per share. (That figure is definitely realistic as it did over $3.40 per share in dividends in 2023).
So $2.51 x a PE of 16 gives a share price in 3 years of $40.16. Taking that backwards wanting 10% per year gives a share price for today of $30.17.
The 2024 financials provided $3.6 billion in Net profit after tax, and using the current exchange rate $2.87AUD per share of earnings. So $2.87 x a PE of 16 gives a current price for today of $45.92. At a PE of 12x you get $34.44 and at 10x $28.70 (obviously). All of those are comfortably above the current (at time of typing) share price of $26.48.
So there's my first stab at the 'rough and ready valuation'. I'm going to dig a bit deeper and play with the figures some more and do a more in depth analysis soon.
Thanks again @Strawman for the helpful video and the Excel tool. (Yet to try that, I was using the desktop calculator too).
WDS is my biggest holding IRL and on SM.
WDS Exit Strategy — Final Tightened Version
Thanks @tomsmithidg — this one slipped past my radar, so I thought I’d take a closer look.
I’ve followed WDS through two full cycles now. Could have made good coin both times, but I didn’t have the discipline to sell when I should have. That’s something I’ve been working on. These days I use AI to keep me honest around timing and cycle structure. It’s been useful for cutting through my own bias.
After going through the numbers, the tape, the macro backdrop, I’m lining up to sell my entire WDS holding around $34 and then look to pick it up again on the next cycle.
Here’s the thinking.
1. WDS is a cyclical, not a compounder
WDS trades in clear, repeatable bands driven by:
- oil
- LNG contract pricing
- geopolitical risk
- project delivery
- dividends
When you map the last few cycles, the structure is pretty consistent:
- $28–$30 → normal‑cycle accumulation
- $20–$22 → deep washout (rare, usually tied to a global shock)
- $32–$34 → fair value
- $34–$36 → top of cycle
- $36+ → usually needs a macro shock. With the Middle East situation, that’s possible, but I’m not building a strategy around it.
Once a stock becomes predictable enough that you can map the whole cycle, the asymmetry disappears. That’s when I sell.
2. The war premium is real
Oil isn’t coming down anytime soon with:
- Middle East instability
- shipping disruptions
- OPEC+ discipline
- slowing US shale
- low global inventories
LNG is even tighter, with Europe and Asia still short.
This supports higher prices, but it doesn’t change the fact WDS is still a range‑bound cyclical. It just shifts the upper band a touch.
**3. For me, $34 is where the risk/reward flips.
There’s nothing wrong with leaving some coin on the table for the next buyer.**
I’m not trying to top‑tick it.
I’m stepping off where the upside gets harder and the downside grows.
4. I’ll buy it back next cycle
This isn’t a bearish call.
It’s a discipline call.
WDS is a great business — just not one you marry.
You date it, exit cleanly, and revisit when the cycle resets.
When the war premium fades and the price drifts back into the $28–$30 zone, I’ll be looking to reload.
5. Final thoughts
Tom’s valuation work is solid — I do agree with it. In my book, valuation isn’t the only reason to hold or sell.
For me, this is about:
- discipline
- timing
- cycle structure
- capital rotation
- not overstaying the party
WDS has been good to me this round.
Time to take the win and redeploy.
If you want, I can give it one more micro‑tighten once you’ve read it with fresh eyes — but this version is already clean, human, and very Foxlowe.