SBR - Sabine Royalty Trust Maintains Its Sell Rating Despite Its Vast Underperformance
2024-06-06 13:19:51 ET
Summary
- Sabine Royalty Trust has underperformed the market, offering a total return of -4% compared to the S&P 500's 40% rally.
- The outlook for the natural gas market is not favorable, with prices expected to decrease and clean energy projects providing headwinds.
- The oil market has seen OPEC's strategy of production cuts lose effectiveness, leading to declining market share and potential for lower oil prices.
Almost four years ago, I recommended buying Sabine Royalty Trust ( SBR ), as the market had beaten the stock to the extreme amid the pandemic and I expected the oil and gas trust to recover strongly from that crisis. Indeed, the stock approximately tripled in the 21 months following my article. However, in the fall of 2022, I recommended selling the stock, after its rally to new all-time highs amid 13-year high prices of oil and gas. Since that article, the stock has dramatically underperformed the market, as it has offered a total return of -4% whereas the S&P 500 has rallied 40%. I last reiterated my bearish thesis about six months ago. Since that article, the stock has declined 5% whereas the S&P 500 has rallied 16%....
Sabine Royalty Trust Maintains Its Sell Rating, Despite Its Vast Underperformance