Shareholders in BG (LSE: BG) (NASDAQOTH: BRGYY.US) have endured a tough start to 2014 as a result of a disappointing update from the company, which essentially amounted to a profit warning.
This sent shares plummeting to just over 1,000p each from around 1,250p prior to the release — a fall of 20% in a matter of hours is clearly not good news for investors.
However, investors in BG should not despair! Furthermore, investors who do not currently hold the shares may wish to give it a closer look because it could just help you retire early.
Indeed, looking back at BG’s share price chart over the last five years highlights just how volatile the stock is. Certainly, previous management found it challenging to manage expectations and, although the market felt that new management was doing a slightly better job at this, BG remains a very difficult business to predict over the short run.
So, disappointments such as these have happened before and, looking at the chart, whenever BG has fallen to 1,000p per share, it has recovered to at least 1,200p within a year. The last time it fell to 1,000p was in late 2012, with shares reaching 1,200p in May 2013. While past share price performance is no guide to future share price performance, BG is a volatile stock that seems to be hit hard reasonably frequently, only to recover in a matter of months.
Of course, BG group is now an interesting contrarian play and, as all Fools know, often the best time to invest in a company is when that company is least appealing to most investors. BG is currently unloved, creating the potential to buy in at a relatively attractive price while sentiment is at a low ebb.
Indeed, BG continues to own a diverse and attractive selection of assets, with Brazil and Australia being of particular note due the vast potential that they could offer in future years.
Sure, the continued uncertainty surrounding operations in Egypt could act as a drag on shares over the short to medium term. However, the potential profits from the entirety of BG’s asset base could help to push shares higher over the long run. In turn, this could help you to retire early.
