XOM as a Stock Pick
Has anyone here done a valuation of XOM? It seems way too cheap on an intrinsic value basis. I also like JNJ and GS. Both probably 20% undervalued, at least according to my calculations. Also, is there any site that has good research and valuation reports? Thanks.
I like CVX more than XOM. Higher dividend and has greater inroads into alternative energy which will be advantageous when that becomes in-vogue. I think it's also slightly cheaper in terms of PE ratio last I checked.
Both energy companies are great.XOM will probably achieve earning similar to 2008,over 40 bn,while its stock price is far lower (although back in 2008 oil price was also much higher).Since I am very bullish on oil,I believe that its price will keep going up (same for Chevron). GS,I m not sure, financials are very risky,plus it is still unlcear how the new legislation (like Volcker Rule) will effect the company.
For sites,check www.seekingalpha.com/
Just curious, why are you bullish on oil and think it's going up? I bought CVX as a long-term holding, but I think that its price could suffer quite a bit short-term because the dollar should strengthen as QE2 ends and eurozone worries push people into buying more dollars.
How did you come up with a value for XOM? I never really got XOM- they always demanded a premium market valuation compared to other majors because they had higher margins, roic, etc., but they also have been one of the worst at replacing reserves over the last decade. Look at their % of cash flows going to capex versus dividends compared to a company like BP and you'll see what I mean.
The only oil major I ever bought was BP after the spill. I always believe that there are far more compelling opportunities at the smaller E&P level. You can find some decent companies trading below the PV10 of their proven reserves and far below NAV.
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