Marathon Oil (MRO)

Is up 33% the past 6 months. Just rebought it. Trades at a low 14x PE. Pays a 2% dividend, which has been increasing 15% the past 3 years. They buy back shares.

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.

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.

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.

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.

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

It is a big question mark as to how these companies will do under new regulation. They have really struggled and come down over the last few years. Don’t put too much faith in the forward PE on this stock because estimates keep going down. It probably is a value play here.