Bought COP - Conoco Phillips
In my last post, I said oil industry stocks are on our watch list, and I bought 100 shares COP at $59.28 today. Here are the reasons.
1. Industry - Though oil price is influenced by many factors in short term, its long term price trend is primarily determined by supply and demand - if you ask me, supply can hardly catch demand in long term.
2. Company - Third largest integrated oil company in the world. Diversified geographically (an aggressive international player, have 18% - 20% holdings in Lukoil, and other projects in Libya, Venezuela, Saudi Arabia, etc), and strong business lines in both oil production and refining.
3. Peer Comparsion - Among COP, CVX and XOM (top 3 in oil industry), COP has the lowest P/E (5.8 v.s. 8.6 for CVX, and 10.2 for XOM), lowest P/B (1.2 v.s. 2.0 for CVX and 3.3 for XOM), and highest projected earning growth (25% v.s. 19% for CVX, and 18% for XOM).
4. Charts - The stock has very strong support at $60 level. It touched $60 at least 4 times in the last 52 weeks, and everytime rebounded above $60 within less than 3 weeks.
5. Others - The stock is oversold this year. They purchased Burlington Resources and was widely regarded as overpaid. While it is difficult to judge the value of the merged assets, COP's does have proven and successful M&A history.
Strategy: An ideal long term investment candidate, but I will take short-term profit, if it go up 10% in 1-2 months. If the oil / stock continue to go down in the coming days, the next entry point is $56. Will keep every one updated.
1. Industry - Though oil price is influenced by many factors in short term, its long term price trend is primarily determined by supply and demand - if you ask me, supply can hardly catch demand in long term.
2. Company - Third largest integrated oil company in the world. Diversified geographically (an aggressive international player, have 18% - 20% holdings in Lukoil, and other projects in Libya, Venezuela, Saudi Arabia, etc), and strong business lines in both oil production and refining.
3. Peer Comparsion - Among COP, CVX and XOM (top 3 in oil industry), COP has the lowest P/E (5.8 v.s. 8.6 for CVX, and 10.2 for XOM), lowest P/B (1.2 v.s. 2.0 for CVX and 3.3 for XOM), and highest projected earning growth (25% v.s. 19% for CVX, and 18% for XOM).
4. Charts - The stock has very strong support at $60 level. It touched $60 at least 4 times in the last 52 weeks, and everytime rebounded above $60 within less than 3 weeks.
5. Others - The stock is oversold this year. They purchased Burlington Resources and was widely regarded as overpaid. While it is difficult to judge the value of the merged assets, COP's does have proven and successful M&A history.
Strategy: An ideal long term investment candidate, but I will take short-term profit, if it go up 10% in 1-2 months. If the oil / stock continue to go down in the coming days, the next entry point is $56. Will keep every one updated.
posted by Siyu LI at
9:52 PM
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