Is it too late to get on the Exxon train?
Exxon Mobil (XOM) is a stock that almost every one likes and already owns. The question is can it go any higher?
Their principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacturing of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. Exxon Mobil is a major manufacturer and marketer of basic petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a wide variety of specialty products. Exxon Mobil is engaged in exploration for, and mining and sale of coal, copper and other minerals.
Right now the stock enjoys a 100% Barchart technical buy signalafter hitting 12 new highs and appreciating by 5.11% in the last month. The Relative Strength Index is 75.79% and still rising. It trades around 74.85 which is higher than its 50 day moving average of 70.79.
Wall Street brokerage analysts have this as a core holding with 8 buy and 11 hold recommendations for their broker to push on clients, They still project a 10.20% increase in revenue next year along with an 11.10% increase in earnings. EPS is projected to increase 12.07% annually for 5 years out. The 2.3% dividend looks safe and just might even increase.
The general investing public is super high on this stock with the CAPS members on Motley Fool voting 7,403 to 472 that the stock will beat the market. The All Stars agree with a vote of 1,685 to 64.
There is an old Wall Street adage that says when everyone thinks they are right that's the time everyone is wrong. I'm going out on a limb and say that doesn't apply to Exxon. The world economy although not yet in an all out recovery certainly is seeing the light at the end of the tunnel. As the US, European and even emerging markets begin experiencing higher employment there are 5 areas that you just have to invest in.
Those areas are where governments and the rising middle classes will spend their dollars:
2 - Water
3 - Food
4 - Infrastructure
5 - Medical/Pharmaceuticals
Own those companies that are international market leaders in their respective industries and you probably won't go wrong.
In oil and gas you can't get much bigger or better than Exxon. They are the market leader not only in the US but around the world. If the world economy can get better then so will Exxon.
Jim Van Meerten is an advisor to Marketocracy Capital Management who uses his model portfolios not only to manage their mutual funds but also their clients Separately Managed Accounts. You can read his blogs about those model portfolios and investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
Disclosure: Jim Van Meerten through Marketocracy Capital Management has an interest in the stocks mentioned in this blog.