Exxon4life

Exxon Mobil Appears at Lower End of Valuation Range

I own a lot of Exxon and am generally of the opinion that the author is right and it is trading below a rational value. Then again, so are a lot of stocks. For reasons set forth below, I also LIKE Exxon as a company.

I inhereted a large amount of Exxon when my father passed in 2006. I took advantage of the steped up basis and sold 60% of the stock at $90 /share (with capital gains tax calculated at a basis of $64). In case you think you should write me for stock tips, don't. This was luck as, at the time, I expected to the stock to break $100 (which it never did) and I was selling to diversify as 80% of my late father's stock was in ExxonMobil.

I am holding the other 40% based on the fact that what is pushing this stock down is the actions of hedge funds and other forced sellers. That being said, I have a sell order in place for 80% of my stock at a price of $86 and might quickly drop that if the stock hits anywhere over $80 in an inevitable "suckers' rally"

Exxon has many great values: such as a modest but solid dividend and a huge amount of cash. People like Cramer keep bashing Exxon because it spent too much money on a stock buy back. Big deal. They still have 50 billion in cash. FIFTY BILLION. Cramer is all wet on that issue.

On the other hand, Exxon also has some risks. The Bolsheviks (ahem - I mean Democrats - and I can say that as a Democrat) seem to have a poster child hatred for ExxonMobil. When Lenin and Biden take the Winter Palace - ahem I mean White House - you can count on a windfall tax targetting the exact sort of production heavy energy companies like Exxon. On the other hand the energy policy of Sarah Plain, Queen of the Tundra Trash, is like that of a grubby Arab Gulf Potentate - buy support from the local tribesmen by extracting profit tribute from oil companies. McCain seems to think she is an "energy expert" (which is odd because she thinks dinosaurs and people were on the planet at the same time). So God knows what kind of confiscatory energy policy we would see from Old Man Mccain and the Dingbat. That leads to another issue. Exxon has too much of its value in resreves and production. Demand loss hurts XOM relatively worse than say Chevron or RDS.

Exxon is a strong company that is over sold. But I no longer think it is the best and only energy stock to own. Assuming, I can sell my shares in a suckers' rally I intend to get the cash into better energy stocks. I like LNG processing and distribution more than traditional Big Oil. I think they are going to get tax breaks and I think they will see superior profit increases in gas realtive to a giant like XOM.

Exxon is a part of this country. I own their stock, worked for them on a large project as an independent contractor and always try to buy my gas from their retail arm. In other words I like Exxon and see myself as part of their family. Having worked with a lot of Exxon employees I know they have a great corporate team and treat their people very well. My dad's admiration of Exxon and his fifty year investment in their business meant that he was able to go from being middle class to wealthy. Exxon's misdeeds are exagerated and its role in building the USA are ignored. Long term? I still think this is a very good stock and I intend to always own some Exxon. But my general long term bullish position on energy calls for as more diversified allocation in that sector based on gas more than oil and new energy technology along with fossil fuels