Why are Santos shares missing out on the ASX 200 party today?

The United States just reported a softer-than-expected inflation number for October and the S&P/ASX 200 Index (ASX: XJO) sure is celebrating.

Most ASX investors’ portfolios and watchlists are a flood of green today. What a nice change, right?

At the time of writing, the ASX 200 is up 2.53% and the S&P/ASX All Ordinaries Index (ASX: XAO) is up 2.58%.

So, why is the Santos Ltd (ASX: STO) share price struggling?

Santos shares are currently flat at $7.52 per share but have spent much of the day in the red.

Why is Santos underperforming?

We’re possibly seeing a flow-on effect with the Santos share price today, following a major announcement on Tuesday.

Santos reduced its guidance for 2023 production and also revealed plans for a major restructure.

Santos will split its business into two divisions: Upstream Gas and Liquids and Santos Energy Solutions.

As reported by my Fool colleague Brooke, the Santos share price fell 5% on the day of the news. It hasn’t recovered since.

The only news from Santos today is another in a series of daily share buyback notices.

Overnight, the price of natural gas fell by 2.02% to US$6.11 MMBtu. The price is down 9.65% over the past month, according to Trading Economics.

Fundie says Santos share price is a sell

Benjamin Goodwin of Merlon Capital writes on Livewire that it’s time to cash in on ASX energy stocks.

His fund has taken profits on Santos shares as well as Woodside Energy Group Ltd (ASX: WDS) shares.

The fund has also sold down Ampol Ltd (ASX: ALD) and Viva Energy Group Ltd (ASX: VEA), as well as the ASX coal shares of New Hope Corporation Limited (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC).

Goodwin said:

Having previously identified and invested in the opportunities made available through prolonged underinvestment in traditional energy fuels and invested on the basis of the estimated risk/return trade-offs, we have been steadily reducing exposures as companies in this space have outperformed.

The post Why are Santos shares missing out on the ASX 200 party today? appeared first on The Motley Fool Australia.

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More reading

• Don’t panic! Here are 7 reasons we can avoid a recession: AMP
• 5 things to watch on the ASX 200 on Thursday
• Top brokers name 3 ASX shares to buy today
• Why did the Santos share price take a dive following the company’s investor briefing?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Bronwyn Allen has positions in Woodside Petroleum Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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