Oil Stocks for 2008
CNN is recommending oil stocks for 2008:
They cover the integrated oil companies, the independents, the refiners, natural gas, and oil services. Here is what they said about the majors:
Experts generally expect nearly all oil stock sectors to do well in 2008 – although not as well as in 2007.
If you think the price of crude is going to go down, investors like Mark Gilman, an oil and gas analyst with the Benchmark Company, say go with the big boys.
With their diversification, high dividends and low stock prices compared to revenue, big oil companies that produce, refine and market oil and natural gas like Exxon Mobil (XOM, Fortune 500), BP (BP), ConocoPhillips (COP, Fortune 500), Chevron (CVX, Fortune 500) and Royal Dutch Shell (RDSA) make good defensive plays.
I especially liked this next bit:
In the integrated space, Gheit likes BP, simply because he thinks the company’s fortunes must change. Over the last few years, the British company has suffered a major pipeline spill in Alaska, a tipped-over rig in the Gulf of Mexico, a natural gas trading scandal, and a lethal refinery explosion.
“They’ve been in the penalty box for the last five years,” said Gheit. “Everything that could go wrong went wrong.”
As a result, BP’s stock has suffered, at least relative to other “Big Oil” companies. It gained 15 percent in the last 12 months and 84 percent over the last five years, compared with Conoco’s 26 percent gain over the last 12 months and 248 percent gain since 2002. It could be catch-up time for BP.
Disclaimer: I own COP stock (and have since 2002), and Gheit owns BP stock. Gheit has also been wrong on the direction of oil prices for the past 5 years.