Opinions
John Stephenson
Hess Corp.
HES-N
PAST TOP PICK
Jul 23, 2010
(A Top Pick July 24/09. Down 1%.) Sold in May with a little bit of profit. Had great exploration/production upside, particularly offshore. Now that things are clearing up in the Gulf, it might be time to look at this again.
$52.700
Stock price when the opinion was issued
integrated oils
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Very successful in things like Equatorial Guinea where they have big offshore oilfields. Tends to be volatile. With current high oil prices, this is likely to be a stock that benefits. Very much a leveraged play on your outlook on oil. Has a lot of growth coming through. Be a little cautious until you see that some of the production issues have been dealt with.
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TOP PICK
Energy is bouncing back. Hess has resources in Mexico, North Sea and Africa (Guyana). They used their free cash flow to develop new resources, They found the largest new oil find in the last 20 years. They could produce a million barrels a day in Guyana by 2025. Great cash flow, and they do share buybacks. Great growth ahead. (1.4% dividend, Analysts' price target: $71.95)
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HOLD
It is interesting because they have some very large finds. One is about as large an oil find as there has been in the last 20 years. It has rallied off the lows and has come back quite nicely although not rallying as well as others in the group. It is not one of the leadership groups.
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DON'T BUY
Surprisingly, they're the second-biggest US oil company, exposed to high-cost regions like the Bakken shale. It's sensitive to oil prices. This year, they raised their dividend for the first time since 2013. They keep making bug discoveries near Guyana, and in Malaysia, Thailand and South America. It's too complicated for him. He's rather own a straightforward offshore or domestic producer. If crude is stuck in the mid-70s, this is less attractive.
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