Price The Market Part 25
Glen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Hello. My name is Glen Bradford and if this is your first time, welcome to my journey of pricing the S&P500. So far, so good.
131. Exxon Mobile Corp (NYSE: XOM) is trading at fair value assuming little to no growth. I don't see that happening for Exxon. Target: $50-$70. Jim Chanos is short this company. Jim Chanos is a bad dude, and I'd highly recommend taking what he says seriously. Interested in why? Read this. I think that Exxon doesn't have much upside at all at these prices compared to other companies in the Oil and Gas space because they will have problems selling at present volumes because they are selling more than they are preparing to sell in the future. Now is a great time to shoot underperform on Exxon.
132. Baker Hughes (NYSE: BHI) is what you should roll your Exxon money into. As oil prices start heating up so will Baker Hughes. Sure the last few years were tougher than they were previously, but Baker is bouncing back. I'm a huge fan of Bret Jensen. This could be because I agree with him on pretty much everything he writes. Target: $60-$70. Use the over 30% drop to add or build to your position at lower than average historical multiples.
133. Apache Corporation (NYSE: APA) has been beaten down pretty severly in October. I'm absolutely perplexed why this has gotten beat down so bad recently. Thank you Bret Jensen for doing all the hard DD and sleuthing for me on this one. Target: $110-$120. I'm a fan of growing companies that are trading at the bottom of their 5-year valuation metrics. This is going to be a big winner in my CAPS portfolio. Granted, the price disconnect between Apache and analysts is significant with my favorite uber-bullish Barclays coming in at $151 for their price target. Come on. That's a little steep but anything less than $100 is too cheap to miss.
134. Anadarko Petroleum (NYSE: APC) is tough to value. If you go off of 2008 earnings they are at a P/E of about 13. I'd say that is reasonable. Target: $80-$90. If you don't remember, Anadarko was involved with BP PLC with the Deepwater Horizon event. Anadarko recently signed a settlement agreement to pay BP $4.0B and to release claims against each other. More details on the settlement can be found here. Anadarko has room to run if you take their old earnings metrics once you exclude extraordinary items. I just see more of these in the pipeline and have to include them in the discount. If you were to ignore those you'd be looking at a price in the low triple digits.
135. Cameron International Corp (NYSE: CAM) is down from the $60's or near $60's that it hit earlier this year and approached mid 2008. Target: $45-$55. I just can't get behind this company on the long end or the short end at present because it appears reasonably valued at present. They are presently guiding a few pennies above analyst estimates. That's open for a miss. I'd wait to see where earnings come in before touching Cameron. We'll see where they stand in a month, but their whisper estimate has them coming in at a miss at present. Stay cautious for now.
Extra: Mike sent in US Energy Corp (NASDAQ: USEG) as a small Bakken/Eagle Ford oil play with 50% projected growth for 2012. They recently raised capital at $5.25. Since then their stock has gotten an undeserved sacking. Target: $4-$5. I'd be a seller at $5 though because that $5.25 watermark is now a mental threshhold for owners of the stock. I like to give myself a buffer before those thresholds to make sure I can get out clean. Based on my calculations, this company just turned profitable.
That's all for now, send me your companies at globalspeculation at gmail.com and you'll see me price them here.
Glen and his investors hold no positions in any of the companies mentioned.
