Dr. Stoxx
Stock Trader & Author, Oxford DPhil, Trading Education
Occidental Petroleum is mispriced at about 8.4x trailing earnings and an 8.7% free cash flow yield during an oil shock. Eight times earnings in an oil shock is not a valuation but a clerical error with a ticker symbol. Iran cannot beat the US Navy, so it is waiting out America's vote in 49 days, since Iran does not vote until 2028; owning Occidental beats hiding in Treasuries. x.comÂ
EQT has convexity because low investment in natural gas collides with rising LNG and datacenter demand. The gas basin isn't that deep. x.comÂ
Canadian Natural Resources' slowly declining oil and gas reserves will last many years and give it very steady production. It generates a lot of cash even when markets are tough, has raised its dividend for 26 years in a row, and plans to return 100% of free cash flow to shareholders through dividends and buybacks. x.comÂ
Vista Energy grows over 20% yet trades at about 10x earnings, while most big oil companies trade at 20-25x with single-digit growth. It also works as an oil hedge. x.com x.comÂ
TotalEnergies looks cheap against its earnings at 11x trailing and 8x next year's, while oil and gas producers usually get 14x. Applying 14x to mid-cycle EPS of $8.01 gives a fair range of $98.74 to $125.67 versus $90.94 now. Trailing and forward earnings differ by 34%, widening the range. This is a valuation read only, not fundamental work. x.comÂ
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
EOG Resources is cheap against its sales, with fair value at $221.66 to $282.12, or 5x mid-cycle sales give or take 12%. At $141.31 it trades 36% below the low end of fair, with a pullback zone at $115.65. This is a levels-only read off reported earnings and revenue estimates, with no fundamental work. x.comÂ
Energy Transfer is an irreplaceable tollbooth yielding 6.7%, though as an MLP it is hard for offshore investors to buy and its K-1 tax forms are a drag. The conviction rests largely on a close friend, one of the best energy portfolio managers in the world, who made the case for it. x.comÂ
Texas Pacific Land is not a buy here because energy is much closer to a top than a bottom in terms of panic. It would need to fall about $100 further, or energy stocks would need to drop back to earlier lows, before it is worth buying. Energy should be bought amid pessimism and belief in a never-ending glut, typically after an economic calamity sends oil down big, not during a war with Iran. @jc_tricky counters that the energy sector's breakout above 20-year resistance makes those lows unlikely. … Show more
Venture Global seems to offer the most torque to LNG fundamentals, with significant damage to Gulf LNG infrastructure and an exceptional natural gas setup. Seasonal strength, LNG and data center demand and the Middle East energy crisis support gas from a $3 start, with commercials max long and one heat wave from $10 Henry Hub. Gas companies trade on the strip, so they gain from rising prices even when gas funds lose to contango. The project seems viable, with positive news flow. x.com x.com … Show more