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Latest Valuentum Commentary
Aug 8, 2022
Exxon Mobil Surging Higher with Room for Upside
Image Shown: Exxon Mobil Corporation put up stellar results when reporting its second quarter earnings in late July 2022. Image Source: Exxon Mobil Corporation – Second Quarter of 2022 IR Earnings Presentation. Exxon Mobil Corp posted second quarter 2022 earnings that flew past consensus top- and bottom-line estimates. The tailwind provided by elevated raw energy resources prices, rising oil & gas production volumes, ongoing cost structure improvement initiatives, and strong “crack spreads” (refining margins) more than offset headwinds arising from its decision to exit Russia in March 2022 and foreign currency headwinds due to a strong U.S. dollar. Exxon Mobil is one of our favorite energy ideas, and we include shares of XOM in several of the newsletter portfolios as it offers investors a nice combination of dividend growth and capital appreciation upside potential. Shares of XOM yield ~3.6% as of this writing, and our fair value estimate sits at $105 per share of Exxon Mobil.
Jul 7, 2022
2022 Oil & Gas Market Update: “The Outlook for Crude Oil Prices Remains Quite Bullish”
In our view, the outlook for crude oil prices remains quite bullish which in turn should enable Chevron and Exxon Mobil, two of our favorite newsletter portfolio ideas, to churn out “gobs” of free cash flow over the coming quarters. Additionally, both Chevron and Exxon Mobil have substantial exposure to natural gas prices, in part through their enormous LNG export facilities in Australia, which should further support their cash flow generating abilities. We will caution here that a key downside risk the global energy complex faces is potential demand destruction as consumers adjust their lifestyles accordingly to reduce their energy and fuel bills. With that in mind, we have yet to see energy demand falter in a meaningful way, though we are keeping a close eye on the state of the global economy.
Jun 28, 2022
High Yield: Diversified Refiner Phillips 66 A Good Replacement for Broad Consumer Staples Exposure
Image Source: Phillips 66 Investor Update May 2022. Phillips 66 is a top-notch operator in the downstream space with impressive refining and petrochemical assets supported by various midstream operations. Its investment-grade credit rating (A3/BBB+), with stable outlooks, better enables Phillips 66 to tap capital markets at attractive rates, something that we especially like when considering new ideas in the high yield dividend space. A growing global middle class and a growing global population supports Phillip 66's longer term outlook for refined product demand. We like the company as a high yield dividend consideration.
Jun 18, 2022
The Stock Market Is Nearing Technical Support Levels
Image: This year has been a difficult one for equity investors, but the selling pressure that has been common in the markets may start to slow as broader indices such as the S&P 500 begin to approach technical support levels. On the S&P 500, we think there is substantial technical support in the 3,200-3,500 range, which to us suggests that further near-term downside may be limited. The S&P 500 closed at 3,674.84 on Friday, June 17, and we think fair value is much higher. What might be a fair value for the S&P 500 today? Well, throwing the 10-year S&P 500 average multiple of 16.9x on 2023 expected earnings numbers of 251.76 gets to a 4,255 mark on the S&P 500, which is above the last closing level of 3,674.84 for the index. Benchmark Treasury rates remain low relative to history, and balance sheets of many S&P 500 companies are overflowing with net cash, supporting such a multiple, too. All told, investors might expect the stock market to hit technical support levels on the S&P 500 of 3,200-3,500 in the near term, but from where we stand, stocks remain an attractive proposition at the moment and a very attractive consideration over the long haul.
Jun 14, 2022
Stocks Up 70%+ Since COVID-19 Pandemic Bottom, Best Ideas Outperforming So Far in 2022
Image Source: Mike Cohen. Investors should be looking for opportunities today, while others around them are panicking, especially those that leveraged into crypto many months ago near the peak. We continue to be huge fans of the areas of large cap growth and big cap tech as these areas not only are flush with entities that have strong cash-based sources of intrinsic value but also have been beaten down unfairly in recent months, in our view. It may be hard to believe, but we’re staying the course. We like stocks for the long haul, and we don’t expect anything like what happened during the COVID-19 meltdown or the Great Financial Crisis. This is but a "normal" bear market in our view, and we still believe stocks could make a huge rebound in the near term.
May 25, 2022
Newsletter Portfolio Idea Chevron Focused on Returning Cash to Shareholders
Image Shown: Newsletter portfolio idea Chevron Corporation is very shareholder friendly. We view its capital allocation priorities quite favorably. Image Source: Chevron Corporation – May 2022 IR Presentation. Our newsletter portfolios remain overweight energy names as these companies are well-positioned to ride out inflationary pressures and geopolitical turbulence while generating substantial free cash flows and returning “gobs” of cash to shareholders. We include Chevron Corp in the Best Ideas Newsletter, Dividend Growth Newsletter, and High Yield Dividend Newsletter portfolios as the firm has placed a great emphasis on keeping its capital expenditures contained, improving its cost structure, and cutting down on its debt load while returning “gobs” of cash to shareholders.
May 23, 2022
Our Reports on Stocks in the Oil and Gas Complex Industry
Our reports on stocks in the Oil and Gas Complex industry can be found in this article. Reports include BKR, HAL, SLB, BP, CVX, COP, XOM, SHEL, TTE, CTRA, EOG, OXY, PXD, ENB, ET, EPD, MMP, KMI, PSX.
May 20, 2022
Shares of Newsletter Portfolio Idea Exxon Mobil Are Booming Higher!
Image Source: Newsletter portfolio idea Exxon Mobil Corporation has seen its share price boom higher over the past year. We see room for additional capital appreciation upside potential going forward. Shares of Exxon Mobil Corp have boomed higher over the past year, and we see room for additional capital appreciation upside potential. Our fair value estimate for Exxon Mobil sits at $87 per share, though in the current raw energy resources pricing environment, the top end of our fair value estimate range (which sits at $115 per share) may prove to be a more pertinent gauge of Exxon Mobil’s intrinsic value. We are huge fans of the energy major and include Exxon Mobil in the Best Ideas Newsletter, Dividend Growth Newsletter, and High Yield Dividend Newsletter portfolios. Shares of XOM yield a nice ~3.9% as of this writing, and its dividend growth outlook is quite bright in the current environment.
Mar 7, 2022
Valuentum Weekly: Outsized Energy Exposure Continues to Buoy Newsletter Portfolios
Image: Light crude oil futures once traded for roughly -$40 (negative $40) during the COVID-19 crisis, but have now rocketed to more than $120 in recent trading. Image Source: TradingView. The S&P 500, as measured by the SPY, is down 9% year-to-date, a modest pullback, in our view, particularly in light of the fantastic performance the past few years. Though not necessarily welcome, a down year every now and then for the broader market indexes and a modest bear market can only be expected, at times. The Dow Jones Industrial Average, as measured by the DIA, is down more than 7% year-to-date (not too bad), while the Nasdaq--as measured by the QQQ--and 'disruptive innovation' stocks--as measured by the Ark Innovation ETF--have fallen more than 15% and 36%, respectively, so far this year (data from Seeking Alpha). We like how the simulated newsletter portfolios are positioned. Energy resource prices continue to surge (with WTI crude oil prices skyrocketing north of $120 per barrel at last check), and they are bringing energy equities higher along with them. The simulated Best Ideas Newsletter portfolio, simulated Dividend Growth Newsletter portfolio, and simulated High Yield Dividend Newsletter portfolio are all materially overweight energy equities relative to the energy sector’s weighting in the S&P 500, and we expect to maintain such high tactical "exposure." Both the Energy Select Sector SPDR ETF and the Vanguard Energy ETF soared to 13-year highs last week. Our favorite energy ideas are the largest two energy majors, Exxon Mobil and Chevron, and both have hefty 'weightings' in each of the three aforementioned simulated newsletter portfolios. Russian equities, as measured by the RSX, are down nearly 80% so far this year, and we're pleased to say that we've largely avoided the fall out. We continue to like the broader areas of U.S.-heavy, large cap growth and big cap tech when it comes to long-term secular exposure, and we continue to like energy as a tactical overweight for the foreseeable future across the simulated newsletter portfolios, as much as we did even prior to the huge advance in energy resource prices and the invasion of Ukraine by Russia.
Mar 2, 2022
Evaluating the Exposure of Chevron and Exxon Mobil to Russia’s Energy Industry
Image Shown: Shares of Chevron Corporation (blue line) and Exxon Mobil Corporation (orange line) have skyrocketed over the past six months. Chevron Corp and Exxon Mobil Corp, our two favorite large cap energy firms included as ideas in the newsletter portfolios, have relatively modest exposure to Russia. Peers such as BP plc and Shell plc have publicly stated that they would effectively abandon their stakes in Russian operations, and there is a decent chance Chevron and Exxon Mobil will follow suit. Let's talk about the potential impact.
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The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Nelson Exclusive publication, and any reports, articles and content found on this website are for information purposes only and should not be considered a solicitation to buy or sell any security. The sources of the data used on this website are believed by Valuentum to be reliable, but the data’s accuracy, completeness or interpretation cannot be guaranteed. Valuentum is not responsible for any errors or omissions or for results obtained from the use of its newsletters, reports, commentary, or publications and accepts no liability for how readers may choose to utilize the content. Valuentum is not a money manager, is not a registered investment advisor and does not offer brokerage or investment banking services. Valuentum, its employees, and affiliates may have long, short or derivative positions in the stock or stocks mentioned on this site.