ExxonMobil Corp (XOM)

Lots of numbers look good: profit margins rising (over the past few years), returns on equity and assets rising, P/E below average... plus some hefty recent profits. This is an American giant, embiggening itself successfully.

I don't think Exxon the company really needs a lot of talking up. We all know what they do, how well they are run and the branding they have. But when most people think of Exxon the stock they think of a slow, plodding stock that will go up little by little every year. I have a different outlook.

I will only purchase a stock if I think it is trading at a significant discount to it's true worth, even for a company as historically great as Exxon. I use 3 fundamental keys to determine if a stock is trading at a discount.

The first is the balance sheet, specifically cash to debt. Exxon has over 31 billion in cash and just over 7 billion in debt. Almost a 4.5 to 1 ratio of cash to debt, very nice.

The second key is FCF. I use FCF in 2 ratios, EV/FCF and P/FCF. I prefer P/FCF over P/E as FCF is harder to manipulate and is also what should be used to increase shareholder value, assuming management takes steps to increase shareholder value. Exxon has an EV/FCF of 9.13 and a P/FCF of 9.83, both signs that the stock may be undervalued. Those ratios are not enough alone, however, it is also important to me to see what management does with FCF. I like companies that at least buyback shares, and if they also pay dividends that is a bonus. Exxon, not surprisingly, does both, so management definitely knows how to increase shareholder value.

The final and most important key is to determine how much I think the stock is worth and to then determine if it is a good buy right now. I use a conservative DCF calculation for this and for Exxon I have come up with a value of 117.63 a share. I also accept the fact that this value will probably be wrong. So to give myself a margin of error, or safety, I will only buy when the stock is trading for 40% or more under this price. In this case that means my buy price is anything under 70.58. And what is Exxon trading at as of this moment? 69.11, a good buy.

With no real alterntive that is cost effective, oil is here to stay for a while. Also with the increased demand for the BRIC countries Exxon has the potential for great returns of the next few years. Top it off with the dividend the stock pays, this is great for a long term position.

The oil price will not remain at over $100 as the global economy slows and the situation in the Middle East becomes less bad. Also, we may see some substitution from oil as occured in the 1970s. All of this is bad for Exxon, which has also firmly positioned itself on the wrong side of the green debate.

Everything Exxon does is gold. Even at $35/bbl instead of the current $70+/bbl. Their project execution is peerless and systems integration is very profitable. If they can land a SE Asia/Chinese partnership in the next few years, the sky is the limit.

Exxon isn't evil because it's an oil company -- it's an oil company because it's evil.

Evil elements:
-Exxon Valdez + other environmental misdeeds
-Funds groups that spread climate change disinformation
-Contributes to Third World political strife through involvement in warring states
-For years, sought to block clean energy policy. Current 'efforts' on clean energy are inadequate, especially compared with Shell, Chevron, BP, etc.

HIgh and stable ROI, Will benefit from growing demand for oil. Will have intermediate declines, but solid position for intermediate and long term gains.

Oil dropping on expiring contracts today. Oil demand will increase once again after the Olympics (as China is limiting car/factory usage to try to improve the air quality temporarily.)

After the Olympics... oil demand will rise. You can decide for yourself what will happen afterwards.

I also see natural gas rebounding in the near future, as oil rises in price.

Oil has declined by 2/3rds. Stock has declined 20%. Exxon's earnings will be similar to that of 2004. Stock price will respond and head down. Exxon is a great company & will not go bankrupt, etc. It is just expensive, given the macro environment, price of oil and near-term earnings.

Global domination in an industry that dominates the globe . . .

Exxon will continue to make boatloads of money. Way too much off of me personally at the gas pump... but we might as well cash in on their good fortune.

Who can bet against XOM. Now that World crises and hurricanes are easing oil pressures, Exxon's price is languishing, but the World oil supplies are too precarious for this to last. There will be another notable World event in the next 12 months, and oil will track up like gold. This sensitivity will only increase in the forseeable future as there is no viable fuel alternative, and ever growing world consumption on a finite resource.

Where did all the record profits go? My stock hasn't grown substantially. My dividends haven't grown by much at all. I'm talking about billions and billions of dollars in XOM's pockets------and VERY little in investors pockets. XOM has now set themselves up for Wall Street dissapointment-------how can they make more record profits if oil is WAY down? I am going to sell my XOM for several reasons, but mostly because I have owned their stock for 25 years and they could care less about their investors. It's time to make a change----a BIG change, and SELL my XOM. It's pathetic, but true, that I can earn more by placing my money in a savings account than by keeping it in XOM. How sad.

Exxon Mobil is the world’s largest non-government controlled, oil and gas integrated company with presence in a wide number of locations globally. The company sits on a huge pile of proved reserves and has an average 14.4 years for these reserves to turn off at current production levels.

The company is heavily investing in exploration and production projects that would increase its reserve base in the future. It is targeting the untapped and oil rich areas of West Africa, which are currently the core of its oil production growth. It is believed that the huge amount of cash in the company’s kitty will be beneficial for its capital spending and facilitate its share repurchase program. The higher oil prices and Exxon Mobil’s complex refineries, which can refine lower quality crude oil at a comparatively lower cost, will show a mount in upstream and refinery segments’ revenues, respectively.

With the current focus on deepwater liquefied natural gas projects and its ventures with government controlled oil companies, Exxon Mobil will witness a considerable rise in its earnings going ahead. On the other hand, the company’s operations in unstable areas expose it to political risks associated with the country. Further, the company is placed in the hit list of non-environmental friendly companies and many cases of environmental damaging are pending against it. Losing these cases would make a deep hole in Exxon’s pocket. However, on the back of a number of factors that support the company, its stock is anticipated to record new highs

With the new political atmosphere, this reverse Robin Hood is going to feel some pain in the near future. Outrageous profits are going to be a thing of the past. Big investors will be looking for greener pastures. --plus there will be a noticeable downturn in the DOW about the middle of June. Be careful of this one.

No one can bring online an oil field like Exxon. They have excellent project management skills. They come in on time and under budget. Excellent discipline in cost controls. With oil and gas prices firming up, this company will do quite well.

Exxon Mobil Corporation engages in the exploration, production, transportation, and sale of crude oil and natural gas. It also engages in the manufacture of petroleum products, and transportation and sale of crude oil, natural gas, and petroleum products. The company manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and other specialty products. Exxon Mobil also has interests in electric power generation facilities. As of December 31, 2007, it had 7744 millions of barrels of liquid proved reserves, and 32,610 billions of cubic feet of proved reserves of natural gas. Exxon Mobil also operated 16,797 gross wells. The company operates in the United States, Canada, Europe, Africa, Asia-Pacific, the Middle East, Russia/Caspian region, and South America. Exxon Mobil was founded in 1870. The company was formerly known as Exxon Corporation and changed its name to Exxon Mobil Corporation in 1999. Exxon Mobil is based in Irving, Texas.

What more can I say? Rising price of crude oil is never ending scenario. Demand goes up every second, price goes up every second, and so will the price of the stock in that field of business.

$10B in quarterly profits is evidence enough that Exxon Mobile has a business model that is going to thrive regardless of the price and supply of oil. Leads industry in gross margin and operating margin displaying evidence of a superior infrustructure than competitors for transporting/refining crude. Stock has responded by outperformed the other major oil companies (BP,Chevron) over last 2 yrs.

Diversification throughout the oil/lubricants/plastics industries will earn profits (read:DIVIDENDS) NO MATTER WHAT THE MARKET OR INVESTORS do or think! This is one stock to own forever.