Occidental Petroleum, Lukoil Looking Better Long Term

We restore buy recommendations on U.S. stock Occidental Petroleum (OXY) and Russian stock Lukoil (LUKOY.PK), triggered by stock prices resuming an uptrend above the 200-day average in each case. Moderate risk OXY offers unlevered appreciation potential of 38% to a McDep Ratio of 1.0 and levered appreciation potential of 42% to Net Present Value (NPV) of $89 a share. For higher risk Lukoil stock, the numbers are 150%, 170% and $135 a share.

Recent Stock Idea analyses document the fundamental outlook. We have now doubled to 21, our number of large cap buy recommendations in the past two weeks. We are optimistic that the underlying value we identify may be increasingly recognized in the market by investors. Long-term oil may also confirm an uptrend as the recent average of $72 a barrel for futures prices for the next six years approaches the 40-week average of $78.

Originally published on May 12, 2009.