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Wednesday, February 3, 2010

THE WORLD'S GREATEST OIL COMPANY IS ON SALE


Long-term investors take note: The world's best energy company is sporting an interesting share price.

Study the oil and gas industry for a while, and you're bound to realize ExxonMobil (XOM) is one of the best oil companies to ever turn a drill bit. The company is legendary for its efficiency and ability to value assets... which helps it generate high returns on capital for its shareholders.

Like most every stock, XOM shares were punished during the historic "stress test" of 2008. Shares fell from $94 per share to $62 in just five months. After a brief rally, shares traded back down to that low point in March 2009 and rebounded nicely. This mid-$60s area marks a price floor where seasoned investors will buy shares like crazy.

XOM is nearing the floor again. The company just made a huge natural gas acquisition, which most outsiders feel it paid too much for. This has sent shares down to the mid-$60s... down to that area of solid support.

Short-term considerations aside, ExxonMobil is a great company that lives and breathes "high long-term returns on capital invested." This is the mantra all investors should demand of their long-term holdings. Buying near "ultimate stress test" levels is a bonus.

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