4 Major energy stocks trading at record lows
Despite the S&P 500 being up 65 percent in the last 10 years, the same can’t be said for the S&P energy sector, which is up just 24 percent.
"With these commodities stocks, you're really riding the commodities tiger. A lot of these stocks zoomed last decade, and as long as energy's going to be going, they will ride that, and they will go lower and lower and lower," said value investing blogger Eddy Elfenbein. "I don't think there’s any value here right now."
As the energy sector continues to tumble, the following companies are seeing the worst as they are currently trading at decade lows.
Hasn’t been this low since May 2004.
In addition to suffering from tumbling natural gas prices, which have dropped to almost $2 per million British thermal units (mmBtu), NRG Energy’s stock hit an all-time low when CEO David Crane announced he would step down on December 3 2015.
Hasn’t been this low since May 2005.
The independent energy company, which focuses in the natural gas and oil exploration, development and production, has seen better days. The persistent weakness in the oil and gas market has put a lot of pressure on Southwestern Energy, pushing the company’s stock down 20 percent last month.
Hasn’t been this low since July 2002.
American oil and natural gas company Chesapeake Energy is another firm getting battered by plunging oil prices as the company’s stock fell to its lowest level in 15 years. The industry-wide downturn of low commodity prices continues to haunt the energy sector.
Hasn’t been this low since December 2002
For Freeport-McMoRan, oil decline is only the beginning of their problems as tumbling copper and gold prices have strangled the mining company from both sides, forcing the company’s stock to plunge 64 percent in recent days.
Top 10 ways to prepare for COVID-19
Energy Digital sets out Gartner’s Top 10 ways organisations can prepare for a pandemic, via effective operational risk management.
As the spread of the Coronavirus (COVID-19) continues to develop, many businesses are left uncertain as to whether their risk mitigation plan is sufficient.
In a recent webinar conducted by the research and advisory firm just 12% of 1,500 people believe that their business is highly prepared for the impact of COVID-19, while 56% believed themselves to be somewhat prepared, and 11% believed themselves to be very unprepared.
“Most organizations have done some pandemic planning but still have many unanswered questions about whether they have done everything they can to manage risks,” says Jim Mello, Senior Director, Advisory, Gartner.
Establish a preparedness framework
Establish a team that represents all critical business functions. These people will report directly to executive management and are responsible for prioritising the importance of business activities and organise them in tiers for response and recovery.
Monitor the situation
It is important to ensure that organisations monitor the rate in which the infection is spreading and its severity. Many rely on the World Health Organisation for information.
Be sure to revise revenue forecasts and communicate with investors, as well as suppliers in regards to any potential finance issues. It is important to ensure that the business has the working capital to ride it out.
Ways to ensure this include: working capital checks, seeking loans or government-sponsored financial relief.
Extend personal hygiene and cleaning protocols
It is important to comply with any changes to workplace regulations. In addition, it is important to establish protocols for staff returning from infected areas, as well as extending existing hygiene activities.
Ensure close monitoring of absenteeism rates for signs of problems. It is important to identify critical staff in order to make sure the company can continue to function in their absence and be prepared for up to 40% absentee rates.
In addition to reviewing HR policies and procedures, it is important to maintain a level of sensitivity when it comes to engaging with employees and workplace preferences.
Establish a communication programme
People can feel out of the loop quickly. Establish a spokesperson appropriate for the situation who can maintain lines of communication. In addition, organisations should establish pre-approved messages and scripts for various stakeholders.
Review the impact on the operation
Although this may seem overwhelming, the team established to represent all critical business functions should identify key areas to consider. It is important to maintain a connection with the reality on the ground in countries affected.
Key questions to consider: is transport functioning? Have holidays been extended? Where can operation continue and where do they need to stop?
IT business functions tend to be relatively well-prepared for business continuity. However, it is important to assess the supply chain for critical equipment and keep extra inventory if required.
In addition, organisations should keep in mind remote data centre management and cloud options for critical systems as well as enabling remote working programs and rescheduling any non-essential IT work prioritising key applications.
Review pandemic plans to identify any gaps in response
Conduct a preparedness exercise by validating roles and responsibilities as well as recovery requirements and procedures, in order to identify any gaps in the recover capabilities and resource needs.
Following the establishment of a pandemic plan, identify three lessons learned, key observations or improvements for the exercise. After establishing these organisations should priorities the short and long term follow up actions.