Alex A.C.
Value/GARP Investor, Semiconductor & Financial Analysis, Electronics MEng
Oil majors such as Shell, BP, ExxonMobil and Chevron deserve their multiples because they have consistently generated 10%+ returns across complete energy cycles. They are integrated, now diversified, and control a key commodity for decades ahead. Investors will do fine if they hold for the long term. x.comÂ
Shell's stronger refining profits and larger buyback support the view that its breakout holds. Q3 adjusted earnings reached $10.8 billion versus $9.9 billion expected, as refining margins hit a record $42 a barrel; the three-month buyback rises from $3 billion to $5 billion. Those margins will not last forever. x.comÂ
Exxon Mobil and Chevron are among the highest-quality energy stocks and are long-term holdings, so a quarterly earnings decline is just noise while the thesis is intact. In cyclicals like energy, the approach is to buy only at the deepest cycle lows, never chase, and hold until the thesis permanently breaks. x.comÂ
Exxon Mobil looks set for a pullback despite its uptrend, as it sits where it formed a shooting star before. It is printing a daily spinning top, and a one-minute hanging man was followed by a sweep of highs and rejection on high volume. Options flow showed $8M in December 145 puts and $12M of 180 calls sold. x.comÂ
Chevron already has producing Venezuelan ventures, but expanded agreements still need drilling, dependable power, crews and equipment before more barrels can be sold. Its three ventures were producing about 280,000 barrels a day at the July earnings call, and production had grown 15% year to date by September. Keep holding Chevron, but past gains do not justify buying more at any price. x.com x.com x.com x.comÂ
Exxon Mobil and other critical names that embrace every theme should go vertical, even though hard assets, especially energy, sit in the fog of war and no one wants to chase them. Timing hinges on a late-summer pivot: @radigancarter sees markets front-running it, and winners and losers should be sorted ahead of it. In that shift, duration is torched but bifurcates between abundance and scarcity, convexity is mispriced and beta looks dangerous. x.comÂ
Chevron and Exxon Mobil face capital strain after their hedging blew up. They may need to raise capital through sales or borrowing if they cannot cut costs, and are struggling to keep enough capital to sustain their dividend floor. x.comÂ
Low forward earnings multiples alongside strong investor sentiment put these S&P 500 stocks atop the smart-value ranking. APA, Viatris, EOG, Marathon Petroleum, Valero, Phillips 66, Allstate, Diamondback, Everest and Centene trade at 6-15x forward earnings after one-year gains of 17-150%; the accompanying ranking also weighs free-cash-flow yield and momentum. x.comÂ
With the 10-year Treasury yield touching 5%, cash generation and price strength matter more, favoring developed-market large caps that pair the highest free-cash-flow yields with strong momentum. General Motors leads with an 18.8% FCF yield, followed by BP at 13.6%, Marathon Petroleum at 11.6% with a top momentum score of 100, DHL at 11.4% and Shell at 11.3%. Verizon, AT&T, Suncor, Valero and Equinor complete the list with yields of 8.9% to 10.1% and momentum scores from 80 to 100. x.comÂ
Chevron's management is not what it seemed, as the stock has underperformed other large oil companies despite record fuel costs and Venezuelan tailwinds. That undercuts the earlier view that upside oil risk would carry the shares, so cash is better for now. x.comÂ
Oil company stocks are a steadier way to play high oil than crude itself. Crude swings wildly on every headline, while producers' earnings benefit as long as prices stay elevated, even without a further surge. Chevron is the best pick: it gains from higher oil prices and from Venezuelan production, having been the only oil major still operating there before Maduro's capture. The Energy Select Sector SPDR ETF is also a good choice, steadier than crude. x.com x.comÂ
