Wrap you mind around this concept, I sold calls against my position...got it. Now consider I don't wish to buy them back..I will let them expire worthless...got that...I don't expect the stock to drop much beyond 33 so for the timebeing it is dead money. Yes I will be getting a tad more than 3% on my original investment while the US Dollar declines much farther given our monitary policy so my hedge using an asset based stock will be useless. There you have it...if you don't like my views, don't read them and just remain as ignorant as you are now.
I'm not so sure it's specific to the stock, QEII and the general bubbling up of the market has ramped up many stocks. Today's action was the big boys getting out while the getting's good. 40% of the price of a barrel of oil is asset speculation, not supply/demand. To be fair MRO probably is a $30 stock and will stay that way until there's real economic growth to increase oil based on demand, not Wall Street banks rolling free money from the Fed into the asset class. MRO also has a sizeable natural gas component which does reflect supply (too much) and demand (not much), this affects the share price as well.
Sooner or later the Middle East will blow up or the global economy will give us $100+ oil based on demand, then making money in oil stocks will be like trowing darts at a dartboard, MRO, CVX, OXY, pick one, you'll make money.
It might be a 30 dollar stock, however, at 30 bucks it pays a 3.3% dividend, which is a nice way to wait for your 100 dollar barrel. It'll pay about 3% after today. Still a nice dividend. If they hike it again, even better next year.
By similar do you mean they also wrote off some proved assets? If so, I guess I missed that which I am sure did not happen.
CVX preannounced earlier their earnings would be at the lower end of expectations. I missed any announcment by this company about having a production problem anywhere and a search of their info releases never mentioned one.
I think the street has grown tired of waiting for this firm to do better.
I don't know. The earnings beat. It's an oil company too and a big one at that. Inflation = higher oil prices = more profits = MRO is a good hedge against the inflationary monetary policies.
Also, managment seems pretty good. They're buying and developing oil and gas related assets - both upstream and downstream. If the GOP gets control of House, and more seats in the Senate, should be better for the oil industry. I'm not sure why, at less than 10 x projected earnings (which in this case they often beat) this isn't a good buy and the downward movement this morning is an even better buy.
Let's be fair, they are looking at the track record for our CEO:
Bought out Ashland's portion of the refinery JV at the top of the market...not good.
Heavily invested in shale....not very profitable, if at all.
Expanded refinery capacity investing hundreds of millions to do so....in a gas glut.
Now a major project is not going to produce at its estimates, not bad if it were not in deep water as in many more wells needed.
Now then, since this guy seems to have a life lock on his job, why believe his decisions are going to get any better, his history is not good. Oh, let us not forget the late idea to test the market for a refinery segment spinoff....told by advisor, there is no market now and probably will not be.
There is some good news though, the lower the price goes, the higher goes the ROR on the dividend...wow, soon we will get to where a well run company like CVX returns.
Conf call at 2:00pm today. I get the feeling they have some undesirable news. Who knows. The market must have priced in something that didnt pan out, maybe they expected production numbers to exceed prediction, or at least be on the upper end of the range. But whatever it is, the market wants out. And quick. Im not surprised. MRO has been the red headed step child of their peer group for awhile. I apologize to the red headed step children that may read this. Nothing personal.
I would pay particular attention to the little gem about their major project in Green Canyon: one well needs a work over and the resivoir is more compartmented than they expected which results in a decline in production much faster than expected. Translation, it is not as economical to drill here as more wells are needed to achieve desired production.
These guys never surprise on the upside or with good news. That is the trademark of one of the worse managment teams in any of the larger EandP companies in the universe. How this guy Cozelot keeps his job, I cannot comment as my post would get pulled, again.
Yeah. Production numbers are gonna kill this stock. Check out the other E&P's numbers. The market thinks they have overpaid for the risk. So, jump on while you can. All i know is americanbullsdotcom finally got this one right. People are buying in already...