Sabine Royalty Trust Still Has Significant Downside Risk
Summary
- I initially purchased Sabine Royalty Trust during the coronavirus crisis for its cheap valuation and later sold it in late 2022 after it tripled.
- The stock has underperformed the market since late 2022, with a total return of -8% compared to the S&P 500's 47% gain.
- The recent plunge of oil prices below $70, driven by weak demand from China, signals a bearish outlook for Sabine Royalty Trust.
- Given the bearish oil market and potential for reduced distributions, Sabine Royalty Trust bears significant downside risk despite its current valuation.
Torsten Asmus
About four years ago, at the depths of the coronavirus crisis, I recommended purchasing Sabine Royalty Trust (NYSE:SBR) for its extremely cheap valuation, as the stock had been sold off to the extreme by investors who
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