Category Archives: $CVX

2CentView Best Oil Picks revisited…

Tweeted back in Jan 2015 to get some exposure to oil we are naturally short oil – and going long offsets some of the costs higher oil prices impose on our every day spending.

Also, when there is such a quick sell off, stocks get oversold and this leaves buying opportunities – in quality oil stocks with good balance sheets or solid order books which will last through the down turn.

Companies like TransOcean, Sea Drill are too risky as they have a lot of debt.

Hopefully you got involved in one of the picks as they have done well even with oil prices virtually unchanged from Mid-Jan.

Fair Value updates below:

Oil Refiners [ least risky ]

$BP FV = 470 Yield 5.5%
$CVX FV=105 Yield 4%

Oil Equipment:
$HAL (Halliburton) FV=45 Yield 1.7%
$PFC (Petrofac) FV=1100 Yield 4%

2CentView has a core position in $PFC.

2CentView best Oil picks…

Buffett says be greedy when others are fearful – and there is plenty fear about how low oil will go and how much more pain will be felt by energy stocks.

The oil price decline took a breather today – buth this could be just short positions being covered over the US holiday and oil will continue to go lower next week.
Timing is everything so be patient – it may be better to wait for a stock to get a higher level before jumping in…but when oil prices go on a risng trend again it means less money in your pocket, so being long makes sense at some point.

If you buy, buy companies with strong balance sheets and pay a dividend who can weather an oil price around 30-40$ for the next year – analysts are forecasting declines in earnings in 2015 with a recovery in 2016 and 2017.

Some trading Strategies (take profit at Fair Value)
Oil Refiners [ least risky ]
$BP FV = 480 Yield 5.5% Stop 375
$CVX FV=110 Yield 4% Stop 99 [take profit at 115]

Oil Equipment:
$HAL (Halliburton) FV=49 Yield 1.9% Stop 34
And more risky:
$PFC (Petrofac) FV=1200 Yield 6% Wait for stock to go above 650 before considering buying, short interest is still high

Some Oil Drillers may look cheap e.g. $SDL (Sea Drill) but they have a lot of debt and are very risky

It may take a while ( 9-12 months) before stocks hit Fair Value – so buy stocks which pay dividends if you want to be paid to wait – it took 8 months before my gold positions started to make money!

2CentView does NOT have a position in any of the above but is considering one of the above trades.