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#Broker / Analyst Views
Last edited 8 months ago

10-Oct-2019:  "Otto Energy Limited (OEL)  - Reserves upgraded by 16%, GC21 update and FY19 results" update by Wayne Sanderson at Phillip Capital:  

  • Recommendation:  Spec Buy
  • Risk Rating:  Very High
  • 12-mth Target Price (AUD):  $0.105 (was $0.12)
  • Share Price (AUD):  $0.044 (closed at $0.045 on 11-Oct-19)
  • 12-mth Price Range:  $0.035 - $0.082
  • Forecast 12-mth Capital Growth:  138.6%
  • Forecast 12-mth Dividend Yield:  0.0%
  • 12-mth Total Shareholder Return:  138.6%
  • Market cap (A$m):  108.3
  • Net debt (net cash) (A$m):  (10.9) (30/6/19)
  • Enterprise Value (A$m):  97.4
  • Gearing (Net Debt/ Equity):  n/a – Net cash
  • Shares on Issue (m):  2,460.55 
  • Sector:  Energy
  • Average Daily Value Traded ($):  $328,00
  • ASX 300 Weight:  n/a 


Disclosure:  I don't hold OEL.  My current energy sector exposure is via WPL, SXY & COE, plus a handful of uranium stocks which have to be regarded as being particularly high risk.  WPL, SXY & COE are all predominantly gas producers now (rather than oil producers).  I am more bullish on gas than oil.  I don't see much risk with those three, especially WPL - as long as you have a decent investment horizon - and are not likely to become a forced seller in the meantime.  COE is gradually being positively re-rated by the market, and SXY should follow.  SXY has the greatest execution risk IMHO, as they're not as far through their turnaround (as COE are).  I hold all three in my super and WPL + COE in another portfolio as well.  OEL might be worth a look, but I have enough energy sector exposure already, so I'll give them a miss.  I also hold TGG (a LIC) which holds BP and Royal Dutch Shell in their portfolio (as top 10 holdings).  BP and Shell are two of the 4 largest oil companies on the planet - the other two are Chinese.

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