Is Santos ASX Oil Stock, Santos, Worth $0?

According to an article in the Australian Financial Review, a theoretical exercise by Credit Suisse equity analysts has made the startling finding that Santos’s equity is worthless when current oil prices and foreign exchange rates are assumed to persist forever.

The article assumes oil prices at $US 55.20 a barrel and the Aussie dollar at US 80.6 cents. It also highlights the price per share impact of oil stocks such as Woodside and Oil Search which Credit Suisse energy analyst Mark Samter has a net present value at around half the current trading price based on the above oil stock assumptions.

Santos is an oil stock perceived to have a weak balance sheet and high debt. It is at risk of a downgrade of its credit rating which may put more pressure on its share price even after a 50% drop from the highs.

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Trading Insights

Those traders who traded gold stocks in 2013/14 know it is very difficult to time the lows of a falling market. It’s human nature to perceive value-based on recent market prices. We as traders tend to be attracted to reversion to the mean type trades when shock moves occur.

I see traders take excess risk with reversion trades in a time frame that is too short in relation to the weak market dynamics which can lead to serious account depletion before a new trend develops. From my experience as a professional trader I find patience is key. Wait for evidence that selling is exhausted and look for prices to “base” before jumping into mean reversion trades.

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What is Santos Limited?

Santos (STO), standing for South Australia Northern Territory Oil Search, is one of Australia’s leading oil and gas producers – supplying gas to all Australian states, and oil & gas to many other Asia-Pacific regions.

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How Can You Trade Santos Ltd?

With TradeDirect365, you can trade on the price movement of Santos by going long (buy) or short (sell) without actually owning any Santos stock – this is one of the major advantages of trading stocks using CFDs.

To trade Santos using our CFD trading platform, all you need to do is login to your account with us, go to Market Explorer > Shares – Australia > Australian – S and you will find the Santos stock under there. When you hover your mouse on the Santos row and click on the Trade button, an order ticket will open and you can put in your buy or sell trade.

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The Benefits of Trading Santos using CFDs

  • We are ASIC-Regulated: TradeDirect365 is a trading name of Finsa Pty Limited (ACN 158 065 635 and AFSL No. 422661)
  • Low Commission Costs: we are one of Australia’s best value CFD brokers, offering fair and upfront trading costs. Trade ASX stocks like Santos from just $5.00 or 0.07%
  • Easy-to-use Trading Platform: our CloudTrade trading platform is efficient and user-friendly. Find out more about CloudTrade here.
  • Access Over 400 ASX Stocks: as well as Santos, you can trade all the major Australian stocks – BHP Billiton, Comm Bank, Woolworths, ANZ, Telstra and many more
  • Trade Short on ALL Listed Stocks: take advantage of both the rise and fall of the world’s top stocks
  • Leverage: trading CFDs allows you to trade using leverage – we offer 20:1 leverage (5% margin) on stock trades
  • Wide range of markets: trade other asset classes like commodities, forex, indices and cryptocurrencies – all from one trading platform
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Santos & ASX 200 Stocks – CFD Trading Specifications

  • Trading hours: opens Monday – Friday, 08:00 – 16:00
  • Fixed Spread: 7 basis points per leg
  • Margin required: 5% (Leverage of 20:1)
  • Guaranteed Stop-Losses: Yes
  • Guaranteed Stop Distance: 5%
  • Trade Per: cent movement
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Trade Your View on Santos Ltd Today

If you already have a view on what you believe the short-to-medium term is for the stock price of Santos, then why not put your analysis to the test and open a trade today?

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