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Bob Carl

Bob Carl
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  • Merck Still Looks Very Expensive [View article]
    Your analysis is entirely retrospective. What drives pharma stocks is the pipeline and new drugs coming unto the market. Let's have some discussion of the REASONS For the multiple expansion.
    Oct 14 03:56 PM | 2 Likes Like |Link to Comment
  • Venezuela says it will pay less than $1B to Exxon over nationalization [View news story]
    Exxon will net about $250 million more than the $750 million book value, but it will be cash instead of a ledger entry and it adds marginally to its liquidity and financial flexibility. A moral victory perhaps, but little more.
    Oct 10 11:26 PM | 2 Likes Like |Link to Comment
  • Exxon Mobil Still Looks Rich [View article]
    XOM with its AAA rated balance sheet and free cash flows can use this period of weakness in oil prices and declining oil company stock prices to acquire any number of highly leveraged E&P companies as well as troubled BP.

    I suspect BP is on the short list as XOM is historically better at defending environmental liabilities and deferring damages payouts. BP's cash flow can be much more easily impacted by declining crude prices and increasing damage claims and judgments. With participation in the Russian oil development now a forlorn hope, XOM can best drill for oil on Wall Street by (1) continuing its share buyback, and, more spectacularly buying BP. Doing so allows for many economies of scale and, oddly, essentially reunites to their parent ex-Standard companies Standard Oil of Indiana (AMOCO), Atlantic Refining (ARCO) and Standard Oil of Ohio (SOHIO), all these companies comprising the bulk of BP's Western Hemisphere assets. Only Chevron (Standard Oil Company of California) will remain outside the fold.

    Much of Lee Raymond's success was created by his purchase of Mobil (Standard Oil Company of New York, Vacuum Oil) in 1999 creating today's Exxon Mobil. Rex Tillerson overpaid by 50% on his purchase of XTO in 2010. I suspect he will want to end his tenure with another big purchase and that will probably be BP. Personally, I think a merger of near equals with Chevron would be more exciting, but highly improbable.

    I am long and continuing to buy XOM.
    Oct 9 09:14 PM | 1 Like Like |Link to Comment
  • Penn West: Putting Its House In Order [View article]
    Hope springs eternal. Value trap.

    Assuming oil prices hold at current levels, PWE might be okay, but if not, this stock will see $5 before it sees $10/share.

    I have lost hundreds of thousands of dollars buying PWE and its ilk when they seemed undervalued. PWE, along with PGH, and SGL, all looked cheap, with an attractive yield when I bought them. They are cheaper today and will be cheaper tomorrow.
    Sep 28 02:40 PM | 4 Likes Like |Link to Comment
  • FT: Exxon, Rosneft strike oil at sanctioned Russian well [View news story]
    I agree. Ukraine is an artificial country anyway. The never was an independent Ukraine (excepting the Grand Duchy of Kiev) before the Mongol Invasions of the 13th century. After Mongol rule, it was either part of Poland or Russia, then the USSR. Only after the USSR broke up was the "Republic of Ukraine" set up. Putin has a pretty good argument for wanting influence there, if not to take it all back. It was part of Russia, afterall.

    Unfortunately for us XOM shareholders, this crisis is unlikely to be favorably resolved anytime soon. We need to think of the venture as a lottery ticket - very unlikely to pay off, but if it does, it pays off big. XOM management will certainly try to keep the venture alive, but should also mentally "write it off" and look for other opportunities.
    Sep 26 09:57 PM | 2 Likes Like |Link to Comment
  • Exxon Mobil: If You Believe That The Energy Business Is Declining, Don't Buy This Stock [View article]
    I agree: in a frothy market, in an uncertain world, issues in Russia notwithstanding, XOM at current represents a low risk way to earn 10-12% a year. Like the author, I think that is good enough for me.
    Sep 25 12:29 AM | 8 Likes Like |Link to Comment
  • Exxon Mobil: An Unloved Dividend Aristocrat [View article]
    Measured monthly from 12/29/2000 to 08/29/2014, XOM's total annual return was 8.74%. The S&P 500 returned 5.13%, while the S&P Energy Index return was 10.57%.

    Interestingly, the long term return on Standard Oil since 1870 is about 9%.
    Sep 8 12:38 AM | 1 Like Like |Link to Comment
  • Mixed analyst reviews today on oil majors, Exxon seems to fare worst [View news story]
    Actually, I am blind enough to have out-performed the S&P by about 300 basis points over the last 20 years, not including a 22% per annum IRR over a 13 year period from IPO to sale of my public company.

    I was often called incompetent by outside investors and analysts during my CEO tenure, but I had the last laugh, so think I have a bit more perspective than most.

    Lee Raymond was a good CEO, but not without his flaws. Like overrated Jack Welch at GE, he maximized current earnings at the expense of longer term returns. XOM's current production issues result from Raymond's underinvesting in long term production. He cared only about return on capital, not extra barrels. Raymond used cash to buy stock, not barrels. His one big and successful coup was buying Mobil for stock. That was a financial, not an engineering exercise. By buying Mobil and stripping costs out, Raymond could drive EPS during his tenure. Remember too, that it was sainted Lee Raymond who choose Rex Tillerson as his successor.

    It takes a decade or more to bring major production projects on line. XOM is now seeing the results of focusing more on ROC than barrels per day of production.
    Sep 3 08:30 AM | 3 Likes Like |Link to Comment
  • Mixed analyst reviews today on oil majors, Exxon seems to fare worst [View news story]
    I own over 10,000 XOM and I continue buying XOM. I am buying via the DRIP $10,000 every other week and will do so for the next 10 years to age 70. It's a major part of my retirement plan. Strange to say, I actually like analysts comments like those cited in the article as they give me better buying opportunities.

    I hope my belief that XOM's management can deliver over the long term is correct. Since 1870, that has been a correct bet. But then, XOM and its predecessor Standard Oil had John D. Rockefeller, John Archbold, Walter Teagle and much later, Lee Raymond as CEOs. I doubt if Mr. Tillerson is made of the same cloth, but I trust that when his tenure as CEO ends, the next CEO will be more dynamic.

    But time will tell. Maybe Tillerson is right to invest in Russia and to have invested in XTO. Right now, he looks foolish. But as a former CEO myself, I know that outsiders, even analysts, have little insight into what really goes on inside a company. So, I tend to give Mr. Tillerson the benefit of the doubt. We will see.
    Sep 2 07:37 PM | 2 Likes Like |Link to Comment
  • 5 Rules To Buy Quality Dividend Stocks Over Deep Value Butts [View article]
    This is how I try to invest too and I think it is very important at times of frothy markets like we have now to remember the author's well-reasoned points.
    Aug 27 11:14 PM | Likes Like |Link to Comment
  • Canada oil sands projects are biggest losers from low crude price, study says [View news story]
    I would discount this source. It is an environmental group. One wonders what their cost methodology is. They are probably factoring in carbon capture costs, damage to the immediate environment, etc.
    Aug 15 12:50 PM | 10 Likes Like |Link to Comment
  • Pengrowth Energy: A 7% Yield With Long-Term Upside [View article]
    One wonders about PGH. I have a big position here for the reasons cited by the author. Yet if all of this is true, why - other than the PWE scandal - does the market and the analysts not recognize it. The latter have an average target price of $7.47 which in light of developments at Lindbergh greatly undervalues the stock. But it is undervalued for a reason. I wish I knew why and ask fellow readers for their insight.
    Aug 12 01:14 PM | 5 Likes Like |Link to Comment
  • Magellan Midstream: Steady Income And Capital Appreciation [View article]
    I own 60,000+ shares, basis low teens. Great investment, but way ahead of itself trading at 24.5 times forward earnings, yielding only 3.16%. Sure, it is growing nicely, but all of that future growth is capitalized into today's stock price. A dividend discount model that I use (Bloomberg's) returns a present value of $80.62, very near Friday's close of $81.02.

    The Bloomberg DDM assumes a growth rate of 10.8%, and about a 10% discount rate. I think it is very realistic. Conclusion: as stated above, hold, but do not buy.
    Aug 10 12:05 PM | 2 Likes Like |Link to Comment
  • Does Share Price Recover After Dividends Paid Out On The Ex-Date? Part 2: A Case Study With Exxon Mobil [View article]
    Nice analysis.
    Aug 1 11:32 PM | 1 Like Like |Link to Comment
  • Exxon 'Immobile' - No 3% Yield And No Plans To Form An MLP [View article]
    Michael,

    I wrote too fast and none too clearly. I was trying to express my opinion that just spinning off midstream assets into a MLP doesn't do the job. I would rather see a more dramatic breakup of the entire company. That would do the needle. Historically, vertical integration has worked well for XOM though.

    Best,

    Bob
    Aug 1 07:19 PM | 3 Likes Like |Link to Comment
COMMENTS STATS
202 Comments
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