Equinor Is A Long-Term Winner And Should Trade Much Higher

Oct. 27, 2022 6:18 AM ETEquinor ASA (EQNR)2 Comments
Manuel Paul Dipold profile picture
Manuel Paul Dipold
1.24K Followers

Summary

  • Equinor is a winner in geopolitical tensions. In view of this, the share has not yet moved very much.
  • The share has priced in a drop in oil and gas prices. Should this occur, however, the risk of a sharp drop in the share price is low.
  • However, if the prices remain permanently higher, the share price should catch up strongly when the market realizes this.
  • The stock trades at a long-term average P/E of 13. Currently, it stands at 5.4.
  • So I think the risk is low, but the upside is high, with a very good risk/reward ratio.

gas price increase, euro banknotes burn in the gas flame, symbolic concept for for rising energy costs, money in the fire, close-up

winyuu

Investment Thesis

Since the Ukraine war and the almost completed energy separation of Europe from Russia, it seems to be a no-brainer to invest in the gas suppliers of Europe. These include LNG suppliers from the USA, among others, but the most apparent

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Data by YCharts

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Data by YCharts

Equinor realized prices

Equinor

TTF European gas prices chart

Ycharts

Chart
Data by YCharts

fastgraphs EQNR

fastgraphs

fastgraphs Equinor

fastgraphs

Equinor wind energy

Equinor

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Data by YCharts

This article was written by

Manuel Paul Dipold profile picture
1.24K Followers
My focus is on a total return style with long and short positions (10-30% short positions). My main expertise is the current technological and geopolitical shift with the amazing investment opportunities they offer. Therefore, I always try to find stocks or whole sectors with favorable risk-reward structures. My long investment style is a core-satellite strategy: The core consists of large caps and/or ETFs. The satellites around this core are small caps, potential 10-baggers, and undervalued stocks. In short selling, I focus on overvalued stocks that will fall back down sooner or later. My name is Manuel Paul Dipold. Born in Germany but lived 8 years in Asia. I am myself an entrepreneur and have many entrepreneur friends. I am not a professional investor but it´s a hobby I love. So I know Europe and Asia very well and seek undervalued or high-growth stocks - always with valuation, geopolitical and social shifts in mind.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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