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Bob Carl

Bob Carl
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  • Why I Like Exxon Mobil While Others Don't [View article]
    Dead right.
    Jan 26, 2015. 04:19 PM | 5 Likes Like |Link to Comment
  • Exxon, other oil names downgraded at Credit Suisse [View news story]
    Profound insight. Thanks Credit Suisse.
    Jan 23, 2015. 12:20 PM | 2 Likes Like |Link to Comment
  • Exxon Mobil: Slow But Steady, Value Erosion Is Underway [View article]
    Good point. My objective for XOM is 6-7% total annual return over the next ten years. Not great, but at my age and stage in life, preserving capital is paramount and yet I see no reason to own bonds. At least XOM should provide some upside protection when deflation ends and inflation resumes although the present value of (hopefully higher) cash flows will be less in an inflationary environment.
    Jan 21, 2015. 03:22 PM | 8 Likes Like |Link to Comment
  • Exxon Mobil: Slow But Steady, Value Erosion Is Underway [View article]
    I am still buying XOM: control over 20,000 shares now. Sure, I would rather be paying $65 instead of $90, but I buy for these reasons:

    1. Downstream and chemical earnings will partially offset cyclically poor upstream earnings.

    2. Management can reduce the rate of capital expenditures to offset declining cash flows. I assume management is not oblivious to this issue.

    3. Volume entitlement effects tend to increase XOM's share of production as oil prices decline. This is relatively modest, but it does help.

    4. Share repurchases are optional. I expect them to be eliminated or greatly reduced. The company will be more careful in how it allocates cash. Priorities will be keeping the dividend steady and free up cash for acquisitions of producing properties from distressed sellers.

    5. While cash levels are low, XOM can borrow many billions in low cost long term funds at historically low interest rates.

    6. Oil prices, while mostly inelastic, are not totally so. Low prices will increase demand while suppressing supply. There is no law of nature that mandates oil in the $40/bbl range forever.

    7. I expect XOM to make a major acquisition (using treasury shares) of a large integrated oil company. I think it might well be BP. The synergies of such a merger will be profound.

    Finally, 40+ years on investing experience has proven to me that buying good companies when prospects look grim is the most rewarding approach to investing.
    Jan 21, 2015. 02:14 PM | 14 Likes Like |Link to Comment
  • Exxon: Time To Buy As Oil Crashes Hard? [View article]
    XOM's DRIP has no fees at all. All costs are paid by the company and are treated as dividend income on Form 1099.
    Jan 9, 2015. 06:15 PM | 1 Like Like |Link to Comment
  • WSJ: Dividends threatened at global oil majors [View news story]
    Standard Oil Company (New Jersey) (i.e. Exxon Mobil) has paid dividends consistently since its incorporation in 1882. Predecessors Standard Oil Trust and Standard Oil Company (Ohio) paid dividends from 1870. In the middle of the Great Depression though, SONJ cut its dividend from $2/share (not-split adjusted) to $1.25/share. The dividend was restored to $2/share in 1936, then reduced again in 1938-1939 to an annual rate of $1.25 share. By 1941, the dividend was $2.50/share, then reduced in 1942-43 to $2/share. In 1948, the dividend was cut from $4/share to $2/share, but restored to $4/share in 1949. That was the last time the dividend was cut. An observation: management worked hard to quickly restore the dividend whenever it was cut.
    Jan 9, 2015. 12:16 PM | 2 Likes Like |Link to Comment
  • WSJ: Dividends threatened at global oil majors [View news story]
    XOM will cut share repurchases ($12 billion) and Cap Ex (about $38 billion) long before they cut the dividend. Cutting the share repurchases and a probable major acquisition will most likely mean a 25-30% drop in stock prices. If so, I will be a buyer in size, and maybe double my position because in the long run, no company in America has better rewarded its shareholders than Standard Oil (Exxon)

    XOM has seen ups and downs since 1870. It is not likely to succumb to current panic in the oil markets.
    Jan 8, 2015. 12:58 PM | 11 Likes Like |Link to Comment
  • Tompkins Financial: Slow Growth But Handsome Dividend [View article]
    I agree that Bank of the Ozarks has been a giant winner whose nimble management has taken advantage of the aftermath of the the Great Recession's banking crisis. TMP will never be a fast grower like ORZK - it has a totally different ethos. The true test of ORZK will be in the next recession. It is easy to have a great credit culture post recession and when one is acquiring banks and doing credit marks for problematical loans.

    Bank of America, formerly Nations Bank, formerly North Carolina National Bank, under the leadership of Hugh McColl expanded greatly by acquisitions and it had "great" credit metrics and a enviable growth record, very similar to ORZK's today...until under McColl's hand-picked successor, Ken Lewis, it all blew up.

    The problem is - and I speak as a former NYSE company founder and CEO - is that controlling all those acquisitions can be literally impossible. Ultimately, senior management becomes quite removed from local markets and credit issues and that is where the problem arises.

    TMP is the tortoise, ORZK is the hare. Both have their uses.
    Jan 3, 2015. 12:57 PM | Likes Like |Link to Comment
  • Sandfire Resources Looking Attractive Now, But Wait For Copper Price To Turn Around Again [View article]
    The Black Butte prospect (Tintina) has been around for years. It is a high grade but by world standards small copper deposit. It has a limited economic life. It was passed upon in the 1970s by Utah International and Cominco. It is in the upper Smith River watershed in Montana. Environmental objections in this pristine wilderness recreation area are profounf. Don't count on it coming on line anytime soon. That said, I have studied Sandfire for a while and agree, this could be a winner.
    Jan 2, 2015. 11:42 PM | Likes Like |Link to Comment
  • Tompkins Financial: Slow Growth But Handsome Dividend [View article]
    You are absolutely right. Banking with them is a pleasure not a burden,
    Dec 31, 2014. 01:16 PM | Likes Like |Link to Comment
  • Tompkins Financial: Slow Growth But Handsome Dividend [View article]
    Here's a little more insight for readers:

    Prior to its acquisition of VIST Financial Corporation (based in southeast Pennsylvania) in 2012, TMP's slow growth reflected its conservative credit policies and fortuitous location in slow-growth upstate New York. The flip side of this is that TMP avoided the credit recession of 2008-2009, never cut, and indeed raised its dividend during those years and beyond.

    VIST's loan portfolio was more challenged, but analysis of call reports indicate TMP has made substantial, actually excellent, progress in cleaning it up. Synergies from the VIST acquisition have been recent important drivers of earnings growth along with historically low charge offs. Going forward, like most community banks, TMP is presently operating at low net interest margins due to histirically low interest rates. As the Fed raises interest rates, TMP will have an opportunity to increase its net interest margins and operating earnings.

    TMP has solid management, whom I have met with over the years. They are not likely to do anything stupid, but rather to continue a consistent slow-growth policy punctuated by an occasional acquisition.

    Disclosure: I am a former director of VIST and a large shareholder of TMP.
    Dec 31, 2014. 10:33 AM | 1 Like Like |Link to Comment
  • Update: Slashing The Dividend Is A Wise Move By Penn West [View article]
    Readers will recall my bearishness on this money pit. Normally, a dividend cut in these circumstances would be prudent, but PWE has destroyed so much shareholder capital that they we might be better off if they cut cap ex to zero and started making liquidating dividends!
    Dec 19, 2014. 07:18 PM | 1 Like Like |Link to Comment
  • XOM Hedges Against Environmental Backlash Of Shale Oil Mining [View article]
    Nice analysis. XOM has always managed for the long term and ignores the short term. Maybe that's why it's led its industry since 1870.
    Dec 19, 2014. 03:31 PM | 6 Likes Like |Link to Comment
  • Here's Why I Am Seriously Considering Selling My Altria Stock To Buy Chevron [View article]
    MO has a huge current advantage over CVX due to extemely divergent Cap Ex requirements. It will continue to increase its dividend. CVX is a fine company, but wait for it to fall to to the low 60s before buying. Then, I will mortgage my ranch and sell my 14,000 shares of MO, buy CVX and XOM and wait for the turn in oil prices. I expect this to happen by March, 2015. Mark my words.
    Dec 13, 2014. 05:44 PM | 1 Like Like |Link to Comment
  • Don't Buy Exxon Mobil [View article]
    Absurdly short term thinking.

    Exxon merits a premium to its peers due to superior downstream integration, AAA credit rating, and low cost reserves.

    This company or its ancestors has been around since 1870. It has weathered far greater crises than a temporary decline in oil prices. Indeed, look for XOM to grow by buying weaker companies or their assets at discounted prices.
    Dec 11, 2014. 10:20 AM | 19 Likes Like |Link to Comment