Roger
Business Owner, Former Assistant Research Professor
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
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
Refiners such as Valero and Marathon Petroleum may be nearing a top, because the cure for high prices is always high prices. The stocks have made monster moves as crack spreads blow out and foreign buyers fight for distillate capacity. 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
Strategy's preferred instruments can trade at a discount and still recover over time, without needing to return to par, because Michael Saylor built the company to weather this kind of volatility. Oil once fell to -$30 a barrel and recovered, and Exxon, Chevron and Shell came through unscathed. x.comÂ
Oil stocks are worth buying on any dip because this is the biggest energy crisis, and its shock wave has not yet reached the US. Some oil producers are hurt by the Strait of Hormuz blockade, so weakness can be company-specific, as @StockyPlatano's planned short of Occidental Petroleum suggests. x.com x.comÂ
Chevron looks cheap against its sales at $212.76. Fair value is $453.39 to $577.04, or 5x mid-cycle sales give or take 12%, putting the stock 53% below where fair starts. On a separate level it turns expensive above $217.49. This is a levels-only read off reported earnings and revenue estimates, not fundamental work. x.comÂ
ConocoPhillips looks cheap against its sales. At 5x mid-cycle sales, give or take 12%, fair value is $224.66-$285.93, leaving the $127.53 price 43% below the low end; it would be expensive only above $193. The view uses reported earnings and revenue estimates only, without fundamental work. x.comÂ