Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
64
(02-05-2020, 08:58 AM)Binary Wrote: Picked up some SPG yesterday at open.
Guys, I'm looking at CVX and XOM, but I've only been losely following them. What is the reason for the big dips? The balance sheets look decent with managable level of debt, but the free cash flow to dividend ratio is not that happy. Is this normal for those two players?
Have you been following oil prices? Your answer mostly lies there. Oil is a big crap shoot in the short to midterm. This is a seasonally low period for oil demand, and now China is in a virus slowdown. OPEC+Russia is threatening to call an emergency meeting. Will they cut production knowing the US will fill the supply gap in a month? Who knows and Russia seems to get that.
You can read up on some mis-steps from XOM and CVX lately. XOM is spending big CAPEX on new oil in Guyana. That might make sense in the end. It doesn't today and their earnings stink yet again. I'm a BP fan and I got it right for now. BP is cutting back on new fossil fuel CAPEX and gradually investing in renewables. That makes sense because they are a European oil major. XOM and CVX are making cool powerpoint slides pretending they are into renewables going forward. I think XOM and CVX will be OK. I'm not so convinced they are real close to a bottom. I'm interested in XOM and CVX if they drop another 5-10% because I think they will shift gears as the market will demand it. They will survive for sure, but big funds have lost faith and are backing away. That's a big problem for now.
Posts: 1,899
Threads: 48
Joined: May 2013
Reputation:
10
(02-05-2020, 10:51 AM)fenders53 Wrote: XOM and CVX are making cool powerpoint slides pretending they are into renewables going forward.
Haha!
Posts: 1,899
Threads: 48
Joined: May 2013
Reputation:
10
Adding to GSK and MRK. Spinoffs announced for both, and both are down on the day.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
64
Bought some MRK on the opening dip. Been selling puts that expired for a good while now and this looks like a good enough entry.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
64
02-05-2020, 12:45 PM
(This post was last modified: 02-05-2020, 12:46 PM by fenders53.)
(02-05-2020, 11:36 AM)DividendGarden Wrote: (02-05-2020, 10:51 AM)fenders53 Wrote: XOM and CVX are making cool powerpoint slides pretending they are into renewables going forward.
Haha!
I'm no doubt ticking members off that are crossing their fingers and riding these stocks down. I would truly love to hear a forward looking bull thesis because all I read (elsewhere) sounds like 20 years ago. I'm very open to other views. IMO they are just very short trades until they get a meaningful plan.
Posts: 2,411
Threads: 54
Joined: Jul 2013
Reputation:
34
(02-05-2020, 12:45 PM)fenders53 Wrote: (02-05-2020, 11:36 AM)DividendGarden Wrote: (02-05-2020, 10:51 AM)fenders53 Wrote: XOM and CVX are making cool powerpoint slides pretending they are into renewables going forward.
Haha!
I'm no doubt ticking members off that are crossing their fingers and riding these stocks down. I would truly love to hear a forward looking bull thesis because all I read (elsewhere) sounds like 20 years ago. I'm very open to other views. IMO they are just very short trades until they get a meaningful plan.
The world uses 100 million barrels crude oil EVERY SINGLE DAY. There is surplus production, primarily thanks to US production growth from shale plays, that has resulted in depressed prices. I have doubts that this growth will continue into the future.
All the hysteria about electric cars and renewable energy doesn't change the fact that worldwide demand for fossil fuels continues to grow every year, and likely will for the foreseeable future.
Market sentiment is as bad as it's ever been on the industry, but the fact remains that unless there are huge technological advances in battery/electric power storage, EV's and renewable energy aren't going to take over the world. They are too inefficient, intermittent, and expensive with current technologies to fully replace fossil fuels.
That is why I continue to own CVX, XOM, and other energy companies.
https://media4.manhattan-institute.org/s...319-MM.pdf
https://economics21.org/inconvenient-rea...gy-economy
https://oilprice.com/Energy/Energy-Gener...tated.html
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
64
Those are big numbers but the problem is the world can easily produce that and more. At least two major oil country's are out of the market now due to sanctions and the market is still oversupplied. The US steps up fracking on short notice whenever oil spikes. It really is a supply demand thing. If it wasn't all the majors would not be near ten year lows while the S&P more than doubled. Renewables are the future challenge but it's coming soon enough.
Posts: 13
Threads: 2
Joined: Aug 2015
Reputation:
0
My low ball offer for XOM filled yesterday at $60. Then I got worried as it began to looked like a falling knife and now it's up 4.6% today. Luckiest buy of the year 
Posts: 1,873
Threads: 35
Joined: Jan 2016
Reputation:
6
02-05-2020, 08:12 PM
(This post was last modified: 02-05-2020, 08:13 PM by divmenow.)
(02-05-2020, 06:01 PM)peachday Wrote: My low ball offer for XOM filled yesterday at $60. Then I got worried as it began to looked like a falling knife and now it's up 4.6% today. Luckiest buy of the year
You look lucky today. But tomorrow it could go down 4% lol. That’s XOM. You can’t too exited yet ?
I added to BEP and PSXP. PSXP is a stock everyone should own. Just saying lol ?
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
64
(02-05-2020, 06:01 PM)peachday Wrote: My low ball offer for XOM filled yesterday at $60. Then I got worried as it began to looked like a falling knife and now it's up 4.6% today. Luckiest buy of the year
Good for you, you didn't buy the top. When you see us all buying a falling knife here, we are not quite at the bottom yet. Wait another week or so and then start nibbling lol.
Posts: 956
Threads: 10
Joined: Feb 2018
Reputation:
10
added to BP, BMY and BDX
I'm loving CAH today. I may add more if it comes down some
Posts: 1,024
Threads: 8
Joined: Aug 2018
Reputation:
16
(02-06-2020, 09:58 AM)stockguru Wrote: added to BP, BMY and BDX
I'm loving CAH today. I may add more if it comes down some
I acquired most of my CAH shares in mid-2018. It took a long while for the value thesis to catch, but hopefully the trend continues. Still looks undervalued, even at these prices. My best guess as to fair value (using FAST Graphs) is somewhere around $70/share.
That said, medical supplies/logistics companies operate on razor thin margins. Doubtful CAH will ever be the sort of company that is growing earnings in double-digit percentages annually.
|
