Royal Dutch Shell (NYSE:RDS-B)

CAPS Rating: 4 out of 5

The Company consists of the upstream businesses of Exploration & Production and Gas & Power and the downstream businesses of Oil Products and Chemicals. It also has interests in other industry segments such as Renewables and Hydrogen.

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Player Avatar jimdcraig (< 20) Submitted: 1/25/2008 7:57:38 AM : Underperform Start Price: $68.23 RDS-B Score: +54.32

Shell is a dinosaur. It lacks the access to resources of the National Oil Companies and cannot compete with the cost structure of the independents. The National Oil Companies don't need the Shells anymore to develop their fields, they just call Halliburton or Schlumberger. The majority of Shell income still comes from fields discovered decades ago. Furthermore Shell's internal structures make it less entrepreneurial and nimble than its competitors..........

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Member Avatar dejonese (< 20) Submitted: 4/15/2008 3:14:21 PM
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They have the lowest reserve renewal ratio... but guess who has the most patents for alternative energy from all the oil companies??Also, shell has tried and tested a method for extracting oil from oil shale at an average cost of $30-40. They have exclusive rights to the biggest oil shale resources right here in the US!!! As long as a barrel of oil is above $40, I'd say their renewal strategy looks darn good. Also, they are still buying back shares and trading at the lowest p/b, p/s, and p/e of any major oil co's. As for the clumsy, corporate structure... absolutely agree - but that hasn't stopped GE, has it??

Member Avatar jimdcraig (< 20) Submitted: 9/5/2008 5:22:16 AM
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I understand much of what you are saying. However I question whether they can turn the patents into cashflow and whether the Shale story is enough to offset declines in conventional resources.With regard to your last points, low p/e's are often an indicator of investors views on the future and GE has underperformed the S&P500 by 25% since 2000.

Member Avatar RRobertsmith (55.73) Submitted: 12/11/2014 8:35:32 PM
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I am shorting halliburton and shell but not for the same reasons.....I would also say that "fields discovered decades ago" are very profitable compared to the crap that is todays frac ing targets.

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