How Do XOM Shares Do It?

 | Jan 12, 2012 | 2:22 PM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:










Is ExxonMobil (XOM) being saved, for the moment, by the money coming into the S&P 500? Is that why this company -- which paid an arm and a leg to XTO (XTO) to beef up its nat-gas business at the absolute high -- is just a few points off its high despite Chevron's announcement? Is that why this huge market cap company is outperforming? It sure isn't because of its meager yield. It's not because of its extensive refining operation which I can't believe is doing much better than Chevron's (CVX).

Exxon's always been a company that seems to be blessed. It's as if they can do no wrong. They paid $41 billion for XTO, which is probably worth less than half of that just two years ago. They committed to natural gas but have stated publicly and emphatically they don't think it will be an important surface vehicle fuel, even though powerplant demand is NEVER going to take up the slack of a commodity trading at $2.71.

But the company keeps its halo.

I find this astounding to me. Overvalued. Lumbering. Certainly little to no growth.

That's why I am trying to suss out if it is just about the fact that it is so large and therefore is a huge beneficiary of S&P funding whether it deserves it or not.

I will give them this. They have a real buyback that has returned hundreds of millions of shares over the years. It does seem to actually support the stock.

But I will say this also. The XTO acquisition, in hindsight, might have been the dumbest purchase of the new millennium.

Random musings: Both Caterpillar (CAT) and McDonald's (MCD) trading over par. Bizarre that both companies doing well simultaneously, but both are executing perfectly.

Columnist Conversations

Put bomber targets Lifelock and doubles the open interest into earnings. Seller hit the 15c bids on 10K Nov 8 ...
QQQ puts purchased this morning are up by almost thirty percent from cost.
I identified a cycle pattern on the weekly Twitter (TWTR) chart in an article on The Street last week.
Options prices are rather cheap here, hence buying some protection is always smart to do when volatility is lo...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.