I took a position in Gibson Energy at $25.50 and would like to add some more. Can you please give your analysis on this stock based on its U.S. acquisition and its future venture in oil by rail?
Thanks for the assignment.
Gibson Energy Inc. is a mid-stream energy company operating in five segments including truck transportation, terminals & pipelines, marketing, propane and natural gas liquids marketing and distribution, and environmental services.
In August of 2013 the company announced that they would be developing a crude by rail terminal in Alberta with a U.S. partner. The facility will have the capacity to move 140,000 barrels per day on two trains with 120 tanker cars and is expected to be operational by the first quarter of 2014. I would have to say that all the good news regarding this opportunity to ship crude by rail is already baked into the price. What would drive the stock is if the company were to increase the volume it could handle or the price it charges for the service.
The completion of the acquisition of OMNI Energy Services Inc in October of 2012 for $445-million has expanded GEI's footprint in the United States, but once again the news has already been incorporated into the price of the stock.
A study of the charts will help identify the current trend, support, and resistance that you should consider with this investment.
The three-year chart depicts a lovely advance that started with the initial public offering in June of 2011, which was priced at $16.00, and continued until the shares hit an all time high of $27.37 in May of 2013. However that was all the punch in the bowl which put an end to the good times. The stock pulled back to support near $21.00 by August of 2013 where it caught a bounce to $24.50 before it met resistance. The MACD and the RSI both signalled a buy near the end of August.
The six-month chart provides a close up of the sell signals generated by the MACD in May and July, as well as the buy signal in August. Currently both the MACD and RSI are indicating that we should expect more selling pressure. GEI needs to hold support along the 200-day moving average if the current advance is going to be sustained. Although the 4.517 per cent dividend yield is tempting I would anticipate a pullback to $23.00.
Make it a profitable day and happy capitalism!
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