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Paper: Value and Momentum Within Stocks, Too

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Please select the image below to download, “Value and Momentum Within Stocks, Too:” Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks. To download the full report, please click here (pdf). ———- Actual results … Read more

Our Reports on Stocks in the Oil and Gas Complex Industry

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Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The data in the tables of each of the below companies’ respective stock pages is updated the weekend after the publishing of this update. Please click on a company name below to view the corresponding equity … Read more

Phillips 66: A Huge Winner in 2022

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Image Source: Phillips 66 By Brian Nelson, CFA The refining industry continues to mint profits these days, and Phillips 66 (PSX) has been no exception. We warmed up to the stock earlier this year, and we continue to like shares. The high end of our fair value estimate stands at $140 per share, and we would not be surprised to see the company reach those levels, given sentiment regarding energy equities these days. Phillips 66’s portfolio spans operations across ‘Midstream,’ ‘Chemicals,’ ‘Refining’ and ‘Marketing and Specialties,’ and the big driver in the company’s third-quarter report, released November 1, was its ‘Midstream’ division, which saw adjusted pre-tax income advance to $645 million from $292 million in the year-ago period. Though most … Read more

2022 Oil & Gas Market Update: “The Outlook for Crude Oil Prices Remains Quite Bullish”

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Transcript Hello, this is Callum Turcan, Associate Director of Research at Valuentum Securities. WTI and Brent have pulled back moderately from recent highs, though near-term futures remain just above $100 per barrel which is well above levels seen last year. As of early July, both WTI and Brent are in backwardation, meaning spot prices are trading at a higher price than later dated future contracts. In other words, the trajectory of future crude oil prices is expected to have a downward slope. Please note that backwardation does not mean that things are going to rapidly deteriorate for the global energy complex, as this dynamic is due to global oil inventories steadily declining over the past two years or so. Backwardation … Read more

Shares of Newsletter Portfolio Idea Exxon Mobil Are Booming Higher!

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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. By Callum Turcan Shares of Exxon Mobil Corporation (XOM) 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 ~$90 per share, though in the current raw energy resources pricing environment, the top end of our fair value estimate range 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 … Read more

Evaluating the Exposure of Chevron and Exxon Mobil to Russia’s Energy Industry

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Image Shown: Shares of Chevron Corporation (blue line) and Exxon Mobil Corporation (orange line) have skyrocketed over the past six months. By Callum Turcan In the wake of Russia invading Ukraine (again) in February 2022, geopolitical tensions between the West and Russia have reached levels last seen during the height of the Cold War. At the beginning of March 2022, near term WTI and Brent futures were trading north of $100 per barrel while liquified natural gas (‘LNG’) spot prices and European natural gas prices remained incredibly expensive. The supply-demand dynamics for crude oil and natural gas were already tight before this crisis, and in light of the expansive sanctions programs enacted by the West and some of its allies … Read more

Valuentum’s Theses on Best Ideas Chevron and Exxon Mobil Playing Out

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By Callum Turcan Raw energy resources pricing has surged higher during the past year with room to run. The global energy complex is on the rebound as demand for crude oil and refined petroleum products is steadily recovering from the worst of the coronavirus (‘COVID-19’) pandemic. As demand for electricity and heating needs held up well during the pandemic, liquified natural gas prices (‘LNG’) put up a strong year in 2021 and remain elevated. The OPEC+ cartel is committed to slowly phasing out its crude oil supply curtailment agreement first enacted in 2020, effectively limiting growth in global oil supplies at a time when demand is rebounding at a brisk pace. We view the near-term outlook for the global energy … Read more

High Yielding Philips 66 Has a Solid Plan in Place to Reward Its Shareholders

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Image Shown: An overview of Phillip 66’s expansive asset base. Image Source: Phillips 66 – November 2021 IR Presentation By Callum Turcan Demand for diesel and gasoline has largely recovered from the worst of the coronavirus (‘COVID-19’) pandemic, though kerosene demand (jet fuel) has a way to go given depressed levels of international travel. The refining giant Phillips 66 (PSX) took advantage of the rebound seen over the past year to pare down its debt levels on a consolidated basis. At the end of December 2020, Phillips 66 had $13.4 billion in net debt (inclusive of short-term debt) on a consolidated basis, which fell down to $12.0 billion in net debt (inclusive of short-term debt) at the end of September … Read more

Our Favorite Energy Giants Chevron and ExxonMobil are Focused on Returning Cash to Shareholders

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Image Shown: Shares of Chevron Corporation (blue line) and ExxonMobil Corporation (orange line) are both up sharply year-to-date as of this writing. By Callum Turcan Two of our favorite energy companies, Chevron Corporation (CVX) and ExxonMobil Corporation (XOM), recently reported their third quarter 2021 earnings reports. We include Chevron and ExxonMobil as ideas in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios given their ample capital appreciation upside and promising dividend growth trajectories. The top end of our fair value estimate range for Chevron and ExxonMobil stands at $144 per share and $110 per share, respectively, well above where each company’s shares are trading as of this writing. Shares of CVX yield ~4.7% and shares of XOM yield … Read more

Schlumberger Recovering, Outlook Bright

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Image Shown: Shares of Schlumberger NV are on the upswing, though the company’s stock price remains far below levels seen before the COVID-19 pandemic. By Callum Turcan On October 22, the oilfield services giant Schlumberger NV (SLB) reported third-quarter 2021 earnings that missed consensus top-line estimates and matched consensus bottom-line estimates. The company’s business continues to recover as oil & gas investment activity is picking up steam around the globe after getting decimated last year in the face of the coronavirus (‘COVID-19’) pandemic. Looking ahead, Schlumberger expects significant improvement in its mid-cycle financial performance from current levels, aided by major cost structure improvements embarked on last year. Financial Snapshot The firm’s GAAP revenues grew by 11% year-over-year due to growth … Read more