Exxon Mobil (XOM)

Because this is an energy name, he doesn’t own it. However, if you are going to own energy, the majors are a nice safe way to play it. Gives you a nice dividend yield and you will probably get a mid-single digit dividend growth.

If you are a believer that the energy market is continuing to stabilize and recover, he likes this company because it is a very conservative play. The largest integrated oil company globally. Feels they are very committed long term to cost control and a strong balance sheet, enabling them to make some very opportunistic acquisitions going forward. Trading at 2.15X Price to BV, which is a discount to its 10-year average of 2.8X. Dividend yield of 3.33%.

His model price of $50 is way below the current trading price, but this is more of an asset play to him. These large cap companies can do a lot. They have a lot of assets and there are a lot of strategic initiatives that they could take to increase shareholder value. Dividend yield of 3.5%.

The smaller players can’t survive. They can acquire assets at cheap prices. They are one of the highest quality names in the space. This is one of the more conservative ways to buy the space.

(Top Pick Jan 8/15, Down 11.52%) And the US$ has gone up. His model price is only $54, but this is the lowest valuation they have in his database back to 1995. It has never been this cheap. It pays a nice dividend and he still owns it. He thinks it is a nice name to own. The best balance sheet and management in the industry.

No one knows what is going to happen with oil. There is an oversupply of oil and the demand is not going to grow very quickly. Will there be an event that causes the price to go up? Seems unlikely. He is zero weighted in energy.

(A Top Pick Dec 3/14. Down 18.13%.) The model price is $73, a negative 5% from today’s price. This is still the best run company in the world. You’re picking this up at a nice price and it gives you a good yield of 3.8%.

He likes this at this time. They had great numbers last week. Very few energy companies are showing good numbers. Their downstream operation is clearly making up for what they are losing on the production side. A good, safe, long term hold. Good yield.

(Top Pick Oct 14/14, Down 6.91%) He recommends buying it. Since 1995 you could only buy this stock once since then. Take advantage. Put it in your portfolio for 5 years and you will be very happy.

He owned the energy space and got stopped out of every single position except for this one. He thinks oil goes lower, down to the $45-$50 area. Something tells him they don’t believe in this recent rally because they have not done a single deal. Thinks they are waiting for the 3^rd shoe to drop, and then we might see them active. Had a great discovery off the coast of South America. They are the best in this tough industry.

Energy tends to do well from February 25 until May 9, which is where we are now. However, we have seen a pickup in energy, so what he has done is to put a trailing stop loss under his position. As the position keeps moving forward, he’ll actually raise the Stop and then exit the stock if it starts to show some weakness.

One of the largest integrated oil companies, but it is hard to get excited about it. It has a wide variety of applications, so it is not going to be hurt by the commodity price as much as a pure E&P play because of the refining side. A slow grower and probably always will be. There are probably better places to be.

In the US if you are going to be in oil and gas the majors are the way to do it. This is not a bad way to wait it out.

This is heavily weighted towards natural gas. An OK Hold, but not a Buy, because there is not much growth.

The only oil name that he is ever owned. With all the carnage out there, this name has never breached any kind of Stop. The move down below $50 in oil is very destructive for a lot of different companies. There will be companies that go bankrupt and that get shut in. You end up with the survival of the fittest at the end, and this one will be one of the survivors. This all leads to higher oil prices in the future. It is going to take a while and you are going to have to be very patient.