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Why I sold Royal Dutch Shell shares

first_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Royal Dutch Shell (LSE: RDSB) shares were one of my first investments. The stock has been a feature of my portfolio for more than a decade-and-a-half. However, although I’ve recommended buying the shares many times over the past few years,  I recently decided to sell all of my holdings in the company. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Selling Royal Dutch Shell sharesI decided to divest my holdings of the oil major for a couple of reasons. First of all, I think the group has lost its way over the past few years.Since 2014, when the oil price plunged from around $100 a barrel to around $40, the company has been on the back foot. It’s tried to remain relevant by cutting costs and refocusing its business model, but these efforts have fallen short.Even after acquiring peer BG, Shell hasn’t regained its former glory. Revenues fell by $80bn between 2014 and 2019. Analysts expect this trend to continue. Revenues could slump by a further $80bn between 2019 and 2021, according to the City. These numbers suggest to me the company is shrinking. That means it makes sense that Shell shares should be worth much less today than in 2014. The second reason I decided to sell is the energy transition. While I’m confident oil & gas will remain two of the world’s dominant energy sources for at least the next few years, the green energy revolution is gaining speed. Shell is trying to keep up, but it seems to be struggling.Last year, the company wrote down the value of its hydrocarbon assets by $22bn. That seemed to me to be an admission from management that some parts of the group may not have much of a future. In total, fossil fuels still make up around 90% of Shell’s capital spending. That tells me the business has a lot of work to do to remain relevant as the world transitions to clean energy. Shrinking business Put simply, the corporation has been shrinking over the past five years, and it’s going to need to spend billions in the medium term to stop revenues falling further. I think this means the group will continue to shrink. And Shell shares will continue to languish over the next few years. Based on those factors, I decided to sell the stock. While the company’s current dividend yield of around 3.5% is attractive in the current interest rate environment, I don’t think it’s going to be enough to make up for the uphill struggle the group could face in the years ahead. I’d much rather own a business with a better growth outlook, which could support a growing dividend yield. A good option to Shell shares may be BP, which has spent more time in the past few years investing in renewables. I reckon that could make the business a better proposition for the long term.  Enter Your Email Address Our 6 ‘Best Buys Now’ Shares Rupert Hargreaves | Monday, 18th January, 2021 | More on: RDSB Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this.center_img Why I sold Royal Dutch Shell shares Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. See all posts by Rupert Hargreaveslast_img read more

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