Exxon (XOM)’s a good stock to own.
One-Year Chart
The only problem I have with buying XOM here is the stock’s been on a run already.
Profits are growing great, P/E’s only 12, oil is hot — this stock is hot.
The thing that stinks is we could bought XOM between $55 and $65 last Summer. Or in the low $70s in September. Now the stock is over $80 and that’s a big move for the largest position in the S&P 500.
Exxon earned $8.47 in 2008 and then profits fell. Now profits are coming back but the stock’s at an all-time high as the ten-year chart shows. This tells me the smart money thinks good things are coming — and the stock deserves to be higher.
Earnings table shows either great profits or fair profits coming in the next four quarters. XOM is certainly worth 15 times earnings.
Fair Value
Exxon still has good upside, but I think the stock’s recent run is scary. Look, this is a great company that will surely keep going higher in the long-run, but like much of the market the stock’s made a run and needs a healthy correction.
Fair Value shows XOM to be worth around $106 now, $121 next year. That’s good upside, but I still think the stock’s got to either correct or base for a while to get me to buy.
