Exxon Mobil (XOM)

Used to own it. He stays away from the larger integrated oil companies. He prefers the refineries in the energy space. Long term is probably going to be OK. The fact that is trading below the 200-day moving average stops them from buying it. The advance in technology in taking oil out of the ground might affect the price of oil. Not really excited about the name.

The chart is in a down channel and is re-visiting recent lows – normally a signal for lower prices to come. He does not feel the bottom has been established yet.

From a technical perspective, the stock looks bad. It has had a big fall-off. Going from $88 to $76 is a big drop for a stock like this. There is some buying support, the yield is not bad, but he would recommend caution and a tight stop, perhaps $72 and would not expect a near-term rise higher than $78. There is probably going to be a period of consolidation.

(A Top Pick Feb 6/17 Down 3%). He thinks this is one of the best ranked companies in the world. A great company, but he thinks the market may be moving away from carbon-based companies. This may be a value trap and could be time to look elsewhere.

XLE-N vs. XOM-N. XLE-N is the US ETF on energy and is primarily 22% XOM-T. He sees very little growth going forward in XOM-N. He thinks there are better plays in the energy sector. He would be willing to gamble more on Canadian names that are so depressed in price. See Top Picks today.

He likes what oil has been doing and sees XOM as a special case. XOM has been in a downtrend, then broke out, then reported earnings which disappointed some. The chart is sideways-looking and choppy. The stock could get back to its old lows in the mid-70’s.

(A Top Pick Jan 5/17. Up 3%.) It's amazing. We have seen a huge movement in prices in crude, but haven't really seen that translate into earnings for them. His model price is $85.58, and it closed at $86.93, a -1.5%.

(A Top Pick Aug 29/16. Down 2%.) This certainly didn’t lose any money in a very harsh environment for oil. It might do well in a reduced carbon world, and look for this one to hopefully lead the way.

IMO-T vs. XOM-N. Oil is not going to take off in a big way but he has been buying oil on weakness over the last while. However he is now thinking of reducing his weight in oil. Now is not the time to step in. He would tend to stick with Canadian because of currency risk. They are getting over bought.

(A Top Pick June 9/17. Down 5.01%.) He would stick with this. It ties in with his theme that energy has been under a lot of pressure because of concerns about excessive supply, but that is actually shutting down further exploration production. It is just a matter of time before energy gets its footing, and a company like this, arguably the best globally traded company, will do ultimately well. While you’re waiting, you can enjoy the 4% dividend yield.

(A Top Pick June 23/16. Down 9.46%.) He loves this one. It is cheap in terms of valuation. Looking back to 1994, it has never been this cheap. His model price is $75.77, 5% lower than the stock price. In terms of balance sheet valuation, he doesn’t think we have ever seen the stock this cheap. Dividend yield of almost 4%.

(A Top Pick May 19/16. Down 7.16%.) Sold this earlier this year. Expects we will be range bound in WTI for the rest of the year. This one is okay, but at this stage, it may not have the leverage if oil prices move up.

We are in a world of a fairly pricey market, a lot of optimism, so he is staying defensive and looking for great dividend, world-class franchise sectors that are out of favour. This is diversified geographically and has balance sheets to withstand a prolonged downturn in oil. Dividend yield of 3.8%. (Analysts’ price target is $86.)

(A Top Pick March 9/16. Up 1%.) He still likes this. Pays a 3.82% dividend. One of the best run companies globally. The cheapest it has been since 1995.

The S&P ratings just downgraded EOM-N on the view that the leverage that they have is going to be tough to continue paying the dividend, unless oil prices can find some footing. This is his worst holding in the last 12 months. He has considered moving to the sidelines, but is going to stick with it for now. Probably a good time to be adding to your position, but make sure you add a Stop.