Jim Lebenthal Marathon Oil MRO-N SELL Feb 11, 2022

It's okay. It got an upgrade today and shares will probably go higher. He prefers Chevron, though.

The stock is at $12.50. He bought the $15 strike calls in November. He added to his holding, and will hold them for two months.

He likes it. On days, oil stocks could soar or slide. Watch the last 30 minutes of trading. The trend is clearly higher on oil stocks.

Trades at a low PE, but is a value trap and is highly cyclical. Their EPS leapt from $3.79 in 20167 to -$1.52 in 2020 to $26.63 last year! Up, down and up big. It's almost impossible to repeat 2022 numbers. Marathon has had a big share buyback. The dividend did grow a little. Today, shares are hitting 5-year highs. However, future 2025 EPS estimates are sliding to less than half of 2022's peaks, because of less demand for oil and gas. Also, the existential long-term obstacle are EV's. Consider the massive clean-energy incentives in Biden's 2022 IRA. It's possible earnings have already peaked--big warning.

Shares outpace peers Valero and Phillips 66 because they have bought back more shares this year, at 14.7%. If the price of oil declines, refiners like MRO will do well, because the gas price never falls as fast as oil, and so the wider the spread the more money the refiners make.