is a robust instrument of economic stimulus.
[...] XOM : rant. | Stock Discussion, Trading Ideas — iBankCoin.com [...]
[...] XOM : rant. | Stock Discussion, Trading Ideas — iBankCoin.com [...]
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(5 votes, average: 4.6 out of 5)
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I think the action in XOM was tricky. The big boys knew everyone expected an apocalyptic sell-off, so they propped it up. Forget for a second the hocus-pocus of an “above-expectations” number. That’s BS. At the end of the day, the stock reported earnings 30% lower than in the year-ago 4th quarter. Q1 and Q2 will be even worse, because XOM’s numbers will be even lower and the comps will be done against Q1 and Q2 of 2008 when oil prices were near their peak. In my playbook, stocks that see accelerating earnings declines go lower.
My feeling (and I remain short with a stop at 80.25) is that now that the media attention is gone, the big players will silently start exiting XOM, perhaps even selling into the disillusioned short-seller covering that will be ocurring, to some extent.
Stick with the trade. XOM is going to touch AT LEAST 65 in the next 2-3 months. You can take that to the bank.
XOM is going to burn through 4billion of their cash per qtr. this year leaving them with 40% declines in earnings a weaker (albeit still strong) balance sheet – but then if you take the amount of writedowns they will have to take on their current projects as the continue to poor ridiculous amounts of money into them the picture because much less rosy.
If oil doesn’t make it back up to 80+ sometime next yr XOM will see it’s balance sheet erode to the point where it deserves to be in the 60’s.
I really like this company as a short paired with any large cap undervalued longs that I decide to enter into, or even SSO for that matter.
The dems will hand out over 50 billion to subsidize their competitors.
XOM just had their glory moment… and now it is gone.