| zdplus Sat Sep 23, 2006 3:23 am |
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Reviewing OIL stocks
Hi, Blast:
I believe the OIL bull has finished its early stage and it's now
at its middle stage.
Looking back the behavior of a bunch of oil stocks in the past
5 years, two oil stocks simply stood out.
They are PTR and VLO .
PTR 's valuation is a little bit higher currently.
VLO is still pretty cheap in terms of P/E.
But even we just look at PTR's fair value, it's clear that
their intrinsic value growth in the past five years simply
beated most other OIL stocks. You can simply compare them
with XLE. I want to understand why these two stocks can
beat OIL stock index XLE by such a great margin, why their
intrinsic values increased so fast at this early stage of OIL bull.
Did they appear cheap from the beginning compared with
other OIL stocks years ago?
/zdplus |
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| lzhang Sat Sep 23, 2006 4:55 am |
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Re: Reviewing OIL stocks
when WEB bought PTR in 2003, it was traded @ PE<=5 with >8% div. What a steal it looked to him! Now PTR traded @ PE~10 with ~5% div, which looked slightly undervalue or inline with other major oil companies in the world.
Its PE exploded instead of shrinked. compared to xom, from PE>13 to PE=10
He is using the same secret weapon on COP now...
zdplus wrote: Hi, Blast:
I believe the OIL bull has finished its early stage and it's now
at its middle stage.
Looking back the behavior of a bunch of oil stocks in the past
5 years, two oil stocks simply stood out.
They are PTR and VLO .
PTR 's valuation is a little bit higher currently.
VLO is still pretty cheap in terms of P/E.
But even we just look at PTR's fair value, it's clear that
their intrinsic value growth in the past five years simply
beated most other OIL stocks. You can simply compare them
with XLE. I want to understand why these two stocks can
beat OIL stock index XLE by such a great margin, why their
intrinsic values increased so fast at this early stage of OIL bull.
Did they appear cheap from the beginning compared with
other OIL stocks years ago?
/zdplus |
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| zdplus Sat Sep 23, 2006 12:54 pm |
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Re: Reviewing OIL stocks
Hi, Lzhang:
Even we suppose a PE 10 for 2001 and now,
PTR 's value increase still outpace XLE significantly;
the same applies to VLO.
This is really amazing. This means their intrinsic value
increasing simply beats most of other oil stocks and
I want to understand why. What's their adv here?
Yes, I agree with you, at this time, PTR 's valuation
is a little bit higher than XOM.
Actually Blast once bought PTR at very low price.
No idea why he sold it when it doubled.
/zdplus
lzhang wrote: when WEB bought PTR in 2003, it was traded @ PE<=5 with >8% div. What a steal it looked to him! Now PTR traded @ PE~10 with ~5% div, which looked slightly undervalue or inline with other major oil companies in the world.
Its PE exploded instead of shrinked. compared to xom, from PE>13 to PE=10
He is using the same secret weapon on COP now...
zdplus wrote: Hi, Blast:
I believe the OIL bull has finished its early stage and it's now
at its middle stage.
Looking back the behavior of a bunch of oil stocks in the past
5 years, two oil stocks simply stood out.
They are PTR and VLO .
PTR 's valuation is a little bit higher currently.
VLO is still pretty cheap in terms of P/E.
But even we just look at PTR's fair value, it's clear that
their intrinsic value growth in the past five years simply
beated most other OIL stocks. You can simply compare them
with XLE. I want to understand why these two stocks can
beat OIL stock index XLE by such a great margin, why their
intrinsic values increased so fast at this early stage of OIL bull.
Did they appear cheap from the beginning compared with
other OIL stocks years ago?
/zdplus |
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| lzhang Sun Sep 24, 2006 3:00 am |
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Re: Reviewing OIL stocks
Hi,
Why use pe=10 for ptr in 2001?
In 2001, xom was traded close to PE=18 (40/2.2), while ptr was traded close to PE=6(20/3.3)
In 2002, xom was traded close to PE=22 (37.70/1.68 ), while ptr was traded close to PE=6 (20/3.3).
All other major oil companies were considerably overvalued compared to ptr.
zdplus wrote: Hi, Lzhang:
Even we suppose a PE 10 for 2001 and now,
PTR 's value increase still outpace XLE significantly;
the same applies to VLO.
This is really amazing. This means their intrinsic value
increasing simply beats most of other oil stocks and
I want to understand why. What's their adv here?
Yes, I agree with you, at this time, PTR 's valuation
is a little bit higher than XOM.
Actually Blast once bought PTR at very low price.
No idea why he sold it when it doubled.
/zdplus
lzhang wrote: when WEB bought PTR in 2003, it was traded @ PE<=5 with >8% div. What a steal it looked to him! Now PTR traded @ PE~10 with ~5% div, which looked slightly undervalue or inline with other major oil companies in the world.
Its PE exploded instead of shrinked. compared to xom, from PE>13 to PE=10
He is using the same secret weapon on COP now...
zdplus wrote: Hi, Blast:
I believe the OIL bull has finished its early stage and it's now
at its middle stage.
Looking back the behavior of a bunch of oil stocks in the past
5 years, two oil stocks simply stood out.
They are PTR and VLO .
PTR 's valuation is a little bit higher currently.
VLO is still pretty cheap in terms of P/E.
But even we just look at PTR's fair value, it's clear that
their intrinsic value growth in the past five years simply
beated most other OIL stocks. You can simply compare them
with XLE. I want to understand why these two stocks can
beat OIL stock index XLE by such a great margin, why their
intrinsic values increased so fast at this early stage of OIL bull.
Did they appear cheap from the beginning compared with
other OIL stocks years ago?
/zdplus |
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| blast_investor Sun Sep 24, 2006 8:34 pm |
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Re: Reviewing OIL stocks
VLO is oil refining stock, this is not in same group as XOM or COP.
I believe the valuation is major piece of investment return. Multiple expansion, and multiple shrinking will affect return in the long run.
Market is not rational on oil stocks. PTR PE was very low below 10 before, now COP PE is close to 5 while others are trading larger than 10.
The job for value investors is to profit from this spread. Cheap stocks in same sector most likely will outperform other more expensive stocks. It is not guaranteed, but mostly it does.
When Warren Buffet invests into COP, market still does not believe COP. But I do believe in COP.
zdplus wrote: Hi, Lzhang:
Even we suppose a PE 10 for 2001 and now,
PTR 's value increase still outpace XLE significantly;
the same applies to VLO.
This is really amazing. This means their intrinsic value
increasing simply beats most of other oil stocks and
I want to understand why. What's their adv here?
Yes, I agree with you, at this time, PTR 's valuation
is a little bit higher than XOM.
Actually Blast once bought PTR at very low price.
No idea why he sold it when it doubled.
/zdplus
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