Leveraged companies like Chesapeake Energy (CHK) demand superb timing. Oftentimes companies like this cannot withstand a delay in pricing recovery. Hence, the usual risk in speculative investments of a financially leveraged company is a lack of that necessary timing. Oftentimes, confirmation of possible timing of favorable events can be found elsewhere.
Exxon Mobil Mentions
Probably the largest vote of confidence by far is all the articles that include a mention about Exxon Mobil (XOM) borrowing to pay the dividend. Exxon Mobil has a very long history of doing things in countercyclical fashion.
For example, back in the 1980s after oil hit $10 per barrel and looked like it would stay there forever, Exxon Mobil began steadily ratcheting up activity levels. The company was one of the first to raise its dividend back then and split its stock. It also was superbly placed when oil headed toward $100 barrel. At that point, Exxon Mobil gradually cut back to the point where many writers complained about the lack of capital appreciation over the last decade.
Now all of a sudden the Mr. Market is worried about borrowing to support the dividend. Personally, I think that Exxon Mobil has its timing just right to snap up bargain properties one more time. No less than John Templeton invested in Exxon Mobil as he stated in a "Wall Street Week Interview" at the beginning of this for a fat dividend of nearly 10% of the time back in the 1980s. That dividend was subsequently increased to the surprise of Wall Street. He held for a huge gain not including the dividends. This time, the countercyclical activity increase will probably repeat the prior success story.
Chevron News
Chevron (CVX) is finally going to bite the bullet. Nothing is more irrelevant to current
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