Stockchase Opinions

Srikanth Iyer Royal Dutch Shell PLC (A) RDS.A-N STRONG BUY Jul 09, 2012

This is a global gorilla. Integrated oil company with deep pockets. Good reserve creation in the next 5-6 years. 15% ROE. Trades at 7.6X. Thinks it will do extremely well. Has a very, very strong profile in general. Yielding about 4.73%.
$67.340

Stock price when the opinion was issued

integrated oils
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BUY
He owns only Canadian oil, not international. The oil price is starting to turn up, and RDS will benefit. RDS is a fine name.
DON'T BUY
Don't buy. Look at Pioneer (PXD) instead which is doing an equity offering now.
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly A way to play the global recovery in oil and gas, while avoiding the pipeline drama in North America. The company is working to become carbon neutral by 2050, is one of the largest producers in the world, and is investing in renewable energy. It trades below book value and at 8.5x forward earnings. It pays a good dividend, backed by a payout ratio under 30% of next year's cash flow. We would buy this with a stop loss at $30, looking to achieve $51 -- upside potential over 30%. Yield 3.37% (Analysts’ price target is $50.86)
DON'T BUY
The conversation is centred around climate. Shell and others are doing as much as they can to shift to renewables. Look at clean power companies instead, as they won't have this overhang. The story is a lot easier when you're not fighting the uphill battle of being characterized as an energy company.
COMMENT
In May, they announced their target of a 20% reduction in emissions by 2030--a major announcement. But then the International Court in the Hague ordered a 45% reduction, which was a shock to RDS. So, they must speed up their plan, which is building a portfolio of low-carbon technologies, including renewables and bio-energy and hydrogen power. This is happening to all the oil majors, but have to compete with renewable companies as investors have bid up these stocks and assets. Short-term, this reallocation of capital has caused capex to collapse among all the oil majors. So, there's a squeeze in the oil market with demand spiking but with limited oil demand. There's no spare capacity. In the medium term we are awash in oil. That said, there could be a short-term opportunity.
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PAST TOP PICK
(A Top Pick May 04/21, Up 22.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with RDS is progressing well. We now recommend trailing the stop (from $30) to $41. If triggered, this would all but guarantee a net investment return of 5%.
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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly We reiterate RDS.A as a TOP PICK as a way to play the global recovery in oil and gas, while avoiding the pipeline drama in North America. The company is working to become carbon neutral by 2050, is one of the largest producers in the world, and is investing in renewable energy. It trades at book value and is priced at 7x forward earnings. It pays a good dividend, backed by a payout ratio under 30% of next year's cash flow. We like how they are increasing cash reserves, while paying down debt and buying back shares. We continue to recommend keeping a tight stop at $41, with upside to $59.50 -- potential over 33%. Yield 4.34% (Analysts’ price target is $59.49)
TOP PICK
Believes company will benefit from Covid-19 recovery (more travel and energy use). Financial metrics such as cash flow, dividends and share buy backs are very strong. Investments into renewable energy will be unmatched, creating large opportunities.
DON'T BUY
Better to stock to a domestic oil company. More opportunities are in Canada than abroad. He doesn't own much oil and gas.
PAST TOP PICK
(A Top Pick Feb 24/22, Up 25%)

Just reported their highest-ever profit of under $40 billion. Pays a 3.5% dividend that should grow 8-10% annually in share buybacks. Shares have been outperforming the MSCI world since late 2020. Oil demand continues to outstrip supply. Announced share buybacks and a dividend hike.