General Question

jackm's avatar

Is now the time to buy BP stock?

Asked by jackm (6207points) June 21st, 2010

They are down by almost 50%. Should I buy a lot of stock, or do you all think it will fall further before it gets better.

And please don’t give me “moral” reasons for not buying it.

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16 Answers

talljasperman's avatar

the company’s going bankrupt…. it’s a gamble… but I think the gulf oil spill will cost more than the company’s worth

Randy's avatar

Yeah, it doesn’t seem profitable in my opinion. They’re giving $20M to victims last I heard. Not many companies can take a $20M hit. Seems too risky… At least for me.

MyNewtBoobs's avatar

Heh… I suppose if they don’t go bankrupt, the only place to go is up again in 30 years like Exxon

dpworkin's avatar

I think there is some hysteria related to its position now. It’s a very strong company. It depends on your investment horizon. If you have time for a long hold I think it will eventually get back within its old trading range.

syz's avatar

BP posted $17 billion in profit from its vast operations around the globe last year, and in the past three years the company generated $91 billion in cash flow from operations.

I suspect that BP will weather this disaster in much better shape than the Gulf.

laureth's avatar

$20M is a drop of oil in the gulf to BP. ;)

talljasperman's avatar

My T.V. reported $20 billion lost from a $50 billion in assests

PandoraBoxx's avatar

Perhaps this will help you make a decision. I would not dump your retirement savings in BP stock, but if you’re willing to sit tight in the long run, and have some money you can afford to lose, it might be worth the gamble in the long run. BP is not just about deep water drilling.

Jeruba's avatar

If you’re not interested in “moral” reasons, I’d say go for it.

jrpowell's avatar

I am not your financial adviser.

But I have been watching BP. I’m assuming that you are “hunting for the bottom” (pun intended).

I don’t think BP has hit the bottom yet. Not even close.

I’m a fan of timing stocks. I did well timing AAPL. I wouldn’t touch BP with a ten foot pelican.

skfinkel's avatar

I thought of this abstractly, but the thought of owning this stock, which has been so ruinous to the nation, and so callous, and so essentially awful, makes me realize that I don’t want it, even if it would have ended up being a good purchase. I have been told this is no way to think about stocks if you want to make money, but there you are.

ETpro's avatar

I would think so. The hysterical cry to protect BP from Obama thuggery is pretty silly. The company is plenty capable of handling the costs of this spill and cleanup.They have pledged $20 for compensation of financial damages to be paid into an escrow account over the next 4 years. To put that in perspective, they will make something in the order of $68 billion in that 4 years. So the talk of bankruptcy is just foolishness.

BP is a sound company with enormous oil assets. Sooner or later, mankind will move beyond fossil fuel reliance, but there is no sign of that happening tomorrow, and there is a great weight of political effort in the West to delay that day as long as possible. Cnamces are when the day finally does come, the big coal and oil companies will just roll their efforts into providing energy using the new methods.

Wideyes's avatar

My only concern is the problem has not been solved yet, you need to re-examine after they plug the well.

zandrace's avatar

I was going to say “buy, buy, buy!” but that sounded to much like “drill, drill, drill”

ItsAHabit's avatar

The most prudent investment strategy is diversification. If you do invest in the stock, It should be limited to a small proportion of your portfolio. Some of the world’s leading economists personally invest most of their assets in no-load mutual funds. it may not make for exciting cocktail party conversation, but it’s likely to be the wisest approach.

ETpro's avatar

@ItsAHabit Excellent point. I am betting BP survives, and if they do then their stock is a bargain right now. But I sure wouldn’t put my whole nest egg into such a risky bet.

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