So many times, it happens too fast
You trade your passion for glory
Don't lose your grip on the dreams of the past
You must fight just to keep them alive
--Survivor
Recent BW cover profiled Exxon (XOM), and suggested that the company is weaker than it appears once you look under the hood. The innuendo running throughout the piece is that XOM may be too risk averse. For example, it hasn't gone hog wild into alternative energy as have others in the industry.
Personally, I view managers at this company to be among the best decision makers on the planet. Suggesting that these folks haven't made intelligent capital investments over the past few years seems pretty bold to me. In an industry littered with leverage and low cash levels, Exxon's balance sheet seems more like the model for others to emulate.
Exxon is one name I'd be interested in socking away for the long term should the stock trade materially lower.
One more thing, the BW article cites XOM's problems with replacing oil and gas reserves. This is, of course, a secular problem for the industry (and the world)--one that paints a bullish picture for fossil fuel related commodities over time.
position in oil
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2 comments:
It is primarily because of dwindling capacities that oil is the only sector I am still long in. XOM is excellent at what they do and I imagine that they will capitalize on supply constraints better than anyone.
XOM managers are sharp cookies. But at current valuation of $300B+, price tag too rich for me.
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