Interesting that Harbour mention competitors, one of which was Woodside Energy Group (ASX:WDS). It used to have a secondary LSE listing but they dropped it (lack of trades). I hold. Market cap AUD 38b or £18b so 9 x bigger than HBR. Its dividend is now 9.25% so not to be sniffed at. It has just decided to go ahead with Louisiana LNG which, by the 2030s, should mean it operates over 5% of global LNG supply. Could turn out to be a less volatile investment than HBR and SQZ etc while still paying a high dividend.
Great analysis, agree it's undervalued, doesn't help being at the sharp end of UK net zero madness. I am concerned that it's carbon capture will be valued destroying, the technology is largely unproven and a serial waste of time and resources in my opinion. Being an ex oil person I into oil, have been an investor in the past time for another punt. It certainly has potential for proven reserves to increase, the Wintershall acq was very positive and it's difficult to lose money on shale oil
Been a good value stock for a couple of years imho that is moving further into buy territory because of macro fears about slumping global demand and opec++ glut coming on stream
Interesting. I see BASF owned 46.5% back in early September and were subject to a 6 month lock-up.
I note too that HBR intend to seek authority at its upcoming AGM on 8 May to conduct an off-market buyback of shares held by BASF and intend to renew that authority every year that BASF is a major shareholder. I suppose HBR don't want BASF to offload shares in the market because that would mean the price could never raise its head from the floor.
BASF isn't exactly shooting the lights out in terms of its own performance (essentially flat over 5 years) but it pays 5% yield. Isn't it moving a lot of production out of Germany because of energy costs? Sounds an expensive undertaking. I imagine they could do with some cash.
So BASF have a controlling stake but only 2 members of the board out of 13.
I see too that Carlos Slim, the Mexican business magnate appears to own 4.3%. He's no fool.
Thanks should have realised that, I guess they brought in a higher price probably not in their interests to sell down and undermine the share price, sit it out and take the divs
Hi Mill, The number is correct per the 2024 Annual Report but I can see the most recent number is 1.44bn, you're right. Obviously EPS alters as a result.
I've updated the article and the basic argument remains the same, but thanks for spotting that, much appreciated!
From 1.08 billion to 1.44 billion that's quite the whammy. Why this increase in share count - or was it still a belated part of the Wintershall Dea transaction?
Hi Simon, as I said to Mill I used the data in the annual report but I also double checked by cross checking the number against Stockopedia. Sadly both were inaccurate/out of date. Yes the additional shares are for the Wintershall vendors. It doesn’t really change the narrative however where HBR appear mispriced, relative to its earning potential. OB
Interesting that Harbour mention competitors, one of which was Woodside Energy Group (ASX:WDS). It used to have a secondary LSE listing but they dropped it (lack of trades). I hold. Market cap AUD 38b or £18b so 9 x bigger than HBR. Its dividend is now 9.25% so not to be sniffed at. It has just decided to go ahead with Louisiana LNG which, by the 2030s, should mean it operates over 5% of global LNG supply. Could turn out to be a less volatile investment than HBR and SQZ etc while still paying a high dividend.
Great analysis, agree it's undervalued, doesn't help being at the sharp end of UK net zero madness. I am concerned that it's carbon capture will be valued destroying, the technology is largely unproven and a serial waste of time and resources in my opinion. Being an ex oil person I into oil, have been an investor in the past time for another punt. It certainly has potential for proven reserves to increase, the Wintershall acq was very positive and it's difficult to lose money on shale oil
Been a good value stock for a couple of years imho that is moving further into buy territory because of macro fears about slumping global demand and opec++ glut coming on stream
Also BASF are selling - that's probably been the fundamental driver of a falling share price. I agree with you that is looks pretty compelling here.
Interesting. I see BASF owned 46.5% back in early September and were subject to a 6 month lock-up.
I note too that HBR intend to seek authority at its upcoming AGM on 8 May to conduct an off-market buyback of shares held by BASF and intend to renew that authority every year that BASF is a major shareholder. I suppose HBR don't want BASF to offload shares in the market because that would mean the price could never raise its head from the floor.
BASF isn't exactly shooting the lights out in terms of its own performance (essentially flat over 5 years) but it pays 5% yield. Isn't it moving a lot of production out of Germany because of energy costs? Sounds an expensive undertaking. I imagine they could do with some cash.
So BASF have a controlling stake but only 2 members of the board out of 13.
I see too that Carlos Slim, the Mexican business magnate appears to own 4.3%. He's no fool.
Hi Do you why BASF is such a big shareholder, seems odd?
BASF was the largest shareholder of Wintershall Dea. Owned over 70% of it I believe.
Thanks should have realised that, I guess they brought in a higher price probably not in their interests to sell down and undermine the share price, sit it out and take the divs
Great article!
Are the number of shares in issue that you are using correct?
And is the eps of £1.06 correct?
You say that shares in issue are 1.08 billion
But HBR have 1.44 billion shares in issue
And there are another 250 million shares for Letter One
Hi Mill, The number is correct per the 2024 Annual Report but I can see the most recent number is 1.44bn, you're right. Obviously EPS alters as a result.
I've updated the article and the basic argument remains the same, but thanks for spotting that, much appreciated!
OB
1.44bn + 0.25bn including the non-voting of course.
From 1.08 billion to 1.44 billion that's quite the whammy. Why this increase in share count - or was it still a belated part of the Wintershall Dea transaction?
Hi Simon, as I said to Mill I used the data in the annual report but I also double checked by cross checking the number against Stockopedia. Sadly both were inaccurate/out of date. Yes the additional shares are for the Wintershall vendors. It doesn’t really change the narrative however where HBR appear mispriced, relative to its earning potential. OB
Ok, thx for clarifying!
Crikey, an even worse chart than Serica.
Great analysis as always. Is the dividend likely to be paid / covered at around $0.264 or 0.198p full year?