Chevron Corp.
New York symbol CVX, is the second-largest integrated oil company in the United States after ExxonMobil. Production accounts for about 80% of its earnings. The remaining 20% comes from refineries and retail gas stations.
Shares of many resource stocks (with the exception of gold stocks) have dropped lately on fears of an economic slowdown in the U.S. However, the long-term outlook for U.S. growth is positive. And meanwhile, China’s economy will likely grow 11% in 2008, and India’s 10%. Both are big resource-consuming countries. Here are two Aggressive resource funds that expose investors to two different levels of risk, measured by the stocks they hold. Both have done very well for us over the last few years. We think they have further gains ahead....
CHEVRON CORP. $81 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $170.1 billion; WSSF Rating: Above average) is the secondlargest oil company in the United States after ExxonMobil Corp. Internationally, it has operations in over 175 countries. Chevron hasn’t fully benefited from the recent rise in oil prices. Its refineries have had to pay more for crude oil, which has hurt profits at this division. Shutdowns for maintenance at some of its operations, as well as the partial nationalization of its assets in Venezuela, have also cut total output. As well, many countries have increased drilling and other taxes on foreign oil companies. In the three months ended September 30, 2007, earnings fell 23.6%, to $1.75 a share (total $3.7 billion) from $2.29 a share ($5.0 billion) a year earlier. However, revenue rose 1.8%, to $55.2 billion from $54.2 billion....
Oil prices recently climbed to over $100 a barrel, but have moved down along with market indexes due to fears of a recession. We feel it’s a good idea to focus on well-established oil and gas stocks that can withstand the inevitable price setbacks, and prosper anew when prices rebound. Here is our analysis of three of our long-term favorites. However, only two are buys at current prices. We also analyze two of our favorite non-oil resource stocks on Page 15. CHEVRON CORP. $81 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $170.1 billion; WSSF Rating: Above average) is the second-largest oil company in the United States after ExxonMobil Corp. Internationally, it has operations in over 175 countries....
UNITED CORPORATIONS $62.50 (Toronto symbol: UNC) (165 University Ave., 10th Floor, Toronto, ON M5H 3B8. 416-947-2583. Buy or sell through a broker) invests in a wide variety of average-quality to above-average quality Canadian and foreign stocks. At last report, 34.6% of the fund’s $1.1 billion portfolio was invested in Canadian equities, 23.7% in the U.S., 20.7% in Europe, 6.2% in the UK, 13.1% in Asia and 1.0% in Mexico and Latin America. The fund’s largest holdings included Bank of Nova Scotia, Royal Bank of Canada, Manulife, Talisman Energy, Algoma Central Corporation, Nexen, TransCanada Corporation, General Electric, TD Bank and Chevron....
ECONOMIC INVESTMENT TRUST $87.01 (Toronto symbol: EVT) holds a well-diversified portfolio of high-quality Canadian, U.S. and foreign stocks. The $724.9 million fund’s largest holdings include E-L Financial, Algoma Central Railway, Chevron, CBS Corp., Marathon Oil, Conoco- Phillips, General Electric, Posco, Renault, Xstrata plc and Sumitomo Mitsui Financial. The fund breaks down geographically as follows: Canada, 47.6%; the U.S., 18.5%, Europe, 18.4%, Asia, 13.4%; and Latin America, 1.1%....
NEWELL RUBBERMAID INC. $26.66, New York symbol NWL, fell 8% this week after it warned that its fourth-quarter sales would be unchanged from a year earlier. That’s mainly due to slowing sales of office products such as pens and desktop accessories. Despite the lower sales, Newell still expects to earn $1.80 a share in 2007 thanks to its cost-cutting plan. The stock trades at just 14.8 times that estimate. Newell Rubbermaid is a buy. SONY CORP. ADRs $55.00, New York symbol SNE, gained over 10% this week after state-owned Dubai International Capital announced that it had acquired a “substantial” stake in the company. The stake is likely under 5%, because Japanese securities law requires a full public disclosure from Sony on any holding over 5%....
MICROSOFT CORP. $29.46, Nasdaq symbol MSFT, still loses money on each Xbox video game machine it sells, six years after the launch of the first console. Costs to fix a recent Xbox defect also hurt Microsoft’s earnings in its latest quarter. But the company feels profits from selling games will offset these losses. For example, Microsoft sold more than 1.7 million copies of the new Halo 3 video game this week for $170 million. Strong interest in Halo 3 should spur more console sales, and increase demand for online gaming services. Microsoft is a buy. CHEVRON CORP. $93.58, New York symbol CVX, continues to enjoy strong cash flow thanks to rising oil prices. It now plans to buy back up to $15 billion of its stock in the next three years. That’s roughly 7% of its market cap. Share repurchases reduce the number of shares outstanding, and increase future per-share earnings and cash flow....
S&P DEPOSITORY RECEIPTS $148 (American Exchange symbol SPY; buy or sell through brokers) are commonly called ‘Spiders’. The fund holds the stocks in the S&P 500 Index. This index is comprised of 500 major U.S. stocks chosen for market size, liquidity, and industry group representation....
The best exchange-traded funds (ETFs) offer well-diversified, tax-efficient portfolios with very low management fees. Due to buyback and share issue arrangements, ETFs always trade close to their net asset value. Here are some of the best deals available in ETFs. We’ve also analysed one we don’t like. ISHARES CDN LARGECAP 60 INDEX FUND $79.86 (Toronto symbol XIU; buy or sell through a broker) (formerly called iUnits S&P/TSX 60 Index Participation Fund) is a good low-fee way to buy the top stocks on the TSX. The units hold a basket of stocks that represent the S&P/TSX 60 Index. The index is made up of the 60 largest and most heavily traded stocks on the TSX. Expenses on the units are just 0.17% of assets....
CHEVRON CORP. $87 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $182.7 billion; WSSF Rating: Above average) is the secondlargest integrated oil company in the United States after ExxonMobil. Operations include refineries, pipelines and 25,800 gas stations under the Chevron, Texaco and Caltex banners. In the past few years, Chevron has used acquisitions to offset declining production. It’s also facing rising operating costs as it develops methods to extract oil and gas from deeper levels. But like research costs at a technology company, investments in new reserves should pay off for years to come. Chevron’s expertise has helped it win a new contract with China’s state-owned oil company to jointly develop a major gas field. This deposit is difficult to get at, and its high sulfur content will cost more to process. But this project has huge long-term potential in light of China’s growing energy needs....