Below are the downside targets for Exxon Mobil (XOM) applying Dow’s Theory. Continue reading
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Category Archives: XOM
Exxon Mobil Price Momentum $XOM
Below is a chart of Exxon Mobil Corp from 1964 to 2022, reflecting Price Momentum data.
Exxon Mobil Corp. Price Momentum $XOM #OOTT
Below is a chart of ExxonMobil Corp. (XOM) from 1964 to 2022, reflecting Price Momentum data.
ExxonMobil 10-Year Targets
Below are the valuation targets for ExxonMobil (XOM) for the next 10 years. Continue reading
U.S. Dividend Watch List: March 6, 2015
The large market decline on Friday brought the Dow Jones Industrial average below 18,000 and the Nasdaq below 5,000. The key data point was from the Federal Reserve meeting and a sign that interest rate hike could come sooner rather than later. Even though the jobs report came out stronger-than-expected, the expectation that rate could rise as soon as June took the market by surprise. With that pull back, our watch list expanded to include 74 companies we will highlight the 25 companies which are at or near its 52-week low. Continue reading
U.S. Dividend Watch List: February 20, 2015
The market finished the week on a high note with the S&P 500 closing at all-time highs. The blue chip Dow Industrial Average topped its all-time high as well, closing at 18,144. The deal to extend Greece’s aid for four months may have been the catalyst but we believe that the market climbs a wall of worry. Despite bullish market sentiment, our watch list contains 50 companies, suggesting that there is interal weakness in the market. While not all fifty companies are worth considering, there are pockets of opportunity. Continue reading
U.S. Dividend Watch List: November 15, 2013
Below are the 10 companies on our U.S. Dividend Watch List that are within 11% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
Posted in BRK-A, CAT, ExxonMobil, NLO Dividend Watch List, Warren Buffett, XOM
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Has the Dow Jones-UBS Commodity Index Reached the Low?
We’ve noticed an interesting pattern which may suggest that the Dow Jones-UBS Commodity Index is nearing the low. In the chart below, we show (at the red circles) the exact same percentage difference between the long-term technical support (red line) and the 2002 and 2013 low. That percentage difference, approximately 7% in both cases, is all that stands between the two low points and the support level. Our primary question is, will the most recent low sustain a double bottom as was the case in the 2001-2002 period?
Already we have indicated the extreme downside target for the commodity index at 79.32, based on the work of Edson Gould’s Speed Resistance Lines. However, if we are in a commodity bull market, as we’ve made reference to in our January 1, 2009 article titled (found here), then there is a good chance that a bounce at the long-term technical support line would mark the end of the cyclical bear move in commodities.
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Posted in Dow Jones-UBS, ExxonMobil, gold, gold bugs, Sysco, SYY, XOM
U.S. Dividend Watch List: October 25, 2013
Below are the 11 companies on our U.S. Dividend Watch List that are within 11% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
February Ex-Dividend Dates
Below are the approximate ex-dividend dates for the month of February 2013 for companies that appear on our U.S. Dividend, Nasdaq 100, Dow Jones Transportation/Industrial Index and International Dividend Watch Lists. All companies are ranked by ex-dividend dates.
Companies that show up on our Watch Lists could be considered the equivalent of the bargain bin of high quality blue chip stocks. Because these companies have increased their dividends every year for at least 10 years in a row (or have had similar dividend policies in the past) or are part of major indexes and within 20% of their respective 52-week low, you know that you’re not overpaying for a company that has demonstrated profitability and the ability to rebound from challenging times.
| Symbol | Company | Price | % from yr low | Qtrly Yield | payout ratio | Ex-date |
| (IBM) | International Business Machines | $203.19 | 11.71% | 0.43% | 23.66% | 2/6/2013 |
| (AA) | Alcoa Inc. | $8.93 | 12.17% | 0.33% | 66.67% | 2/6/2013 |
| (FNFG) | First Niagara Financial Group Inc. | $7.98 | 12.41% | 1.00% | 80.00% | 2/6/2013 |
| (BBT) | BB&T Corporation | $30.92 | 15.04% | 0.75% | 34.07% | 2/6/2013 |
| (CWT) | California Water Service Group | $19.36 | 14.99% | 0.80% | 58.72% | 2/7/2013 |
| (XOM) | Exxon Mobil Corporation | $89.79 | 16.31% | 0.63% | 23.51% | 2/7/2013 |
| (ALTR) | Altera Corp. | $34.49 | 16.46% | 0.30% | 23.26% | 2/7/2013 |
| (SJW) | SJW Corp. | $26.45 | 17.24% | 0.65% | 59.84% | 2/7/2013 |
| (WBS) | Webster Financial Corp. | $22.44 | 18.64% | 0.45% | 21.51% | 2/8/2013 |
| (AAPL) | Apple Inc. | $455.49 | 4.44% | 0.58% | 24.03% | 2/11/2013 |
| (STBA) | S&T Bancorp Inc. | $18.47 | 17.79% | 0.80% | 50.85% | 2/12/2013 |
| (MSEX) | Middlesex Water Co. | $19.51 | 11.96% | 0.95% | 87.21% | 2/13/2013 |
| (UMH) | UMH Properties Inc. | $10.38 | 12.45% | 1.75% | 514.29% | 2/13/2013 |
| (BRCM) | Broadcom Corp. | $32.56 | 13.81% | 0.33% | 35.20% | 2/13/2013 |
| (BA) | The Boeing Company | $76.20 | 13.96% | 0.65% | 37.96% | 2/13/2013 |
| (DD) | E. I. du Pont de Nemours | $47.77 | 14.74% | 0.90% | 58.31% | 2/13/2013 |
| (GRC) | Gorman-Rupp Co. | $29.88 | 17.13% | 0.33% | 28.37% | 2/13/2013 |
| (RBA) | Ritchie Bros. Auctioneers | $21.18 | 18.87% | 0.55% | 62.03% | 2/13/2013 |
| (EGN) | Energen Corp. | $47.80 | 19.21% | 0.30% | 16.52% | 2/13/2013 |
| (PRK) | Park National Corp. | $65.80 | 8.55% | 1.43% | 77.05% | 2/20/2013 |
| (MHP) | The McGraw-Hill Companies, Inc. | $46.99 | 12.91% | 0.48% | 37.09% | 2/22/2013 |
| (BOH) | Bank of Hawaii Corporation | $48.36 | 16.74% | 0.93% | 49.05% | 2/26/2013 |
| (CTWS) | Connecticut Water Service Inc. | $29.38 | 9.78% | 0.83% | 61.78% | 2/27/2013 |
| (TRMK) | Trustmark Corporation | $23.48 | 12.84% | 0.98% | 50.83% | 2/27/2013 |
| (MCD) | McDonald's Corp. | $95.29 | 14.33% | 0.80% | 57.46% | 2/27/2013 |
| (AJG) | Arthur J Gallagher & Co. | $37.88 | 12.12% | 0.93% | 88.05% | 2/28/2013 |
Watch List Summary
The first stock on our list is IBM (IBM). After our April 19, 2012 titled “What Does Warren Buffett See In IBM?” (found here) the stock has been in a consolidation pattern. Despite the critics, IBM managed to fall within 5% of the 52-week low on November 14, 2012. With the stock currently trading within 12% of the 1-year low and a healthy payout ratio of 24%, the stock is well positioned for those interested in long-term positions. We’re including an updated version of Edson Gould’s Altimeter which suggests that IBM is significantly undervalued based on the on dividend relative to the stock price.
According to Gould’s Speed Resistance Lines, IBM has the downside targets of $137.45 and $72.
Another notable stock on our list is Apple with an ex-dividend date of February 11, 2013. On April 14, 2012, we projected the conservative downside target for Apple (AAPL) at $424.15 and the extreme downside target of $212.08 (found here). On an intraday basis, Apple fell within 3% of our April 2012 conservative downside target. Regardless of the market conditions, according to Dow Theory, Apple has upside targets of $528.28 and $616.68 before re-testing the previous highs.
If you happen to be researching these companies for potential investment, it would be advisable to consider the ex-dividend date prior to possible purchases. Owning the shares of the company that you're interested in before the ex-dividend date entitles you to the upcoming dividend payment.
Owning the shares on or after the ex-dividend date means that you would have to wait at least three months before receipt of the next dividend payment. Please verify the ex-dividend date and payout ratio before committing funds to these stocks. Additionally, do not base your next long or short-term purchase on the dividend payment or yield. Instead, get as much research in as you possibly can before the ex-dividend date "just in case" you're actually interested in buying the stock. Payout ratios that exceed 100% should be considered speculative investments.
Sell ExxonMobil (XOM) at the Market
It is now time to recommend that ExxonMobil (XOM) be sold at the market. The stock has performed modestly since the Investment Observation was issued on January 25, 2010. It is highly recommended that anyone who bought the stock based on our insight should re-read the posting. Shortly after our recommendation, XOM fell 15% before heading higher.
In the pursuit of "seeking fair profits" the returns that this stock has provided within the last 333 days say that it is necessary to consider alternative opportunities. The key to investment success and a key principle of economics is to seek the best alternatives.
ExxonMobil (XOM) was recommended when it closed at $65.90 on January 25th. Based on yesterday's closing price of $72.80, XOM has gained 10.47%. If we include reinvested dividends then the gain was 14.84%.
In our observation of the stock on January 25th we were specific in how long the shares might decline and by what percentage we expected the stock to fall further. We said the following:
“…based on the prior Coppock Curve indications, XOM is expected to remain unchanged or fall for another three to six months by about 11% to 18%.”
Five months later, ExxonMobil reached the final bottom on July 2nd at a price of $55.94. As mentioned before, this was a decline of 15% from date of the Investment Observation.
In addition to giving a specific time frame for where the stock would go, we gave a strategy for if you wanted to buy the stock at the January 25th price. The strategy that we outline said the following:
“If we were to invest in stocks the way that Charles H. Dow would then we would buy half of the intended amount now and purchase the second half if the price declines. For example, let's say that you wanted to invest $13,180 in this company. What you would do is buy $6,590 worth of stock now (approximately 100 shares) and hold the stock if the price goes up. If the stock goes down then you would invest the remaining $6,590 at the next level that you felt was ideal. This approach works well regardless of the market that you're in as long as you set aside the amount that you intend to invest before making the first purchase. Also, after making the first investment never invest the second half somewhere else.”
Based on the quality of the observation and a strategy for the investment, readers of this site should have gains that exceed our worst case scenario gain of 14%. The maximum possible gain on this position, including dividends, is 30.42%. We hope that there are those who took advantage of this opportunity.
The annualized return on this position would be close to 14.84% assuming that only purchase was made at the time of the initial Investment Observation. Selling this stock now generates a return of 5.56x greater than the amount of the dividend yield if held for a full year. Additionally, the 14.84% gain exceeds the return on a 30-year treasury purchased on January 25, 2010 by 3.25x.
Those not interested in following through with our sell recommendation can feel comfortable knowing that XOM is a great long-term holding with a 14.84% downside cushion since our investment observation. As the price of XOM rises, it should be noted that the stock faces significant upside resistance at $75, $80 and $95.
As we have indicated in the purposes and function of this site, our goal is to:
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Maximize the annual yield of each trade.
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Reduce the time between buying and selling of each stock.
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Exceed the annual yield of government guaranteed alternatives in each trade.
Investment observations are intended to be a starting point for investigating a quality company at a reasonable price. It is hoped that after doing the background research you can buy the stock at a lower price. Ideally the stock should be held in a tax-deferred account and should not consist of less than 20% of your holdings. Personally, we prefer holding only 2-3 stocks at a time.
For a portfolio of $10,000 with a 20% position that gains 14.84%, the impact on the entire portfolio is a little over 2%. This is contrasted with the same portfolio with a 5% position that gains 14.84%, the impact on the entire portfolio is slightly over half a percent (0.50). By choosing conservative dividend increasing stocks at or near a new low, the odds of success are increased in your favor making the assumed increase in risk worthwhile.
Sell recommendations are intended to deal with the short-term reality of the market. The tracking of the Sell recommendations are the worst case scenario if you happen to have bought a stock at the time the Investment Observation was made (please avoid making this mistake.) We aim for modest but consistent returns, therefore we are happy with 9-12% annual gains.
It is always recommended that when selling a stock, one should not place stop orders, limit orders or orders after hours as detailed in our article "Automatic Orders Don't Provide Protection." This leaves the seller in the position of being vulnerable to the whims of the market makers. Instead, place your sell orders only as a market order during market hours. Some would complain that a market order during market hours might leave some profits on the table. However, we would rather leave some money on the table rather than have it taken away from us by the trades that are placed by institutions and market makers.
Notable Dividend Increases
There were two notable dividend increases today from two of the companies on our watch list. The first came from Exxon Mobil (XOM) which raised their payout amount to $0.44 compared to $0.42. An increase of 4.7%. Another company raising payout is Weyco Group (WEYS). After announcing an amazing quarter where diluted earning per share rose 54% (from $0.22 to $0.34), the board approved a 7% dividend hike. Shareholders will receive $0.16 per share compared to $0.15 per share from prior quarter. - Art
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Investment Observation: ExxonMobil (XOM) at $65.90
The next and most anticipated investment observation is ExxonMobil (XOM). XOM has been on our new low watch list since October 30, 2009. According to Mergent’s, XOM has increased its dividend 26 years in a row. XOM is described by Yahoo!Quotes.com as “Exxon Mobil Corporation engages in the exploration, production, transportation, and sale of crude oil and natural gas.”
The biggest item regarding this company is the fact that the Coppock Curve is signaling, or is about to signal, an all clear for the purchase of XOM stock. In the chart below, you can see the unique buy signal that is given whenever the stock goes into negative territory and then turns upward. Not until the signal crosses from negative to positive does it indicate the best opportunity to buy XOM.
On the following five occasions, XOM turned decidedly higher:
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September 1974 up 207% in 2 years
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January 1978 up 194% in 2 years 10 months
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March 1982 up 491% in 11 years 1 month
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June 1994 up 333% in 6 years 6 months
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February 2003 up 279% in 4 years 8 months
On average, it took 5 years and 3 months to reach the peak in the stock price before a major decline. The worst price decline immediately after the Coppock Curve buy signal was 11% in 1982.
According to Value Line dated June 27, 1997, XOM normally traded at a mean price of 10 times cash flow. In the most recent Value Line dated December 11, 2009, XOM is expected to trade at 8 times cash flow. XOM had a cash flow of $11.58 per share in 2008 and an estimated cash flow of $6.50 for all of 2009. Using the lower cash flow estimate for 2009, XOM is expected to be fairly valued at $52 per share. This is despite the fact that Value Line has a higher cash flow per share for 2010 of $8.45 per share.
Working in favor of XOM is the fact that the company has decreased the number of shares outstanding from 6.9 billion in 1999 down to 4.75 billion at the end of 2009. XOM has gone down a separate path of other companies that borrow in order to lower the number of shares outstanding. Debt remains a small part of XOM’s balance sheet.
One of the most significant elements of the downside risk to this company is the fact that, to this point, we’re in secular bear market. This means that the market could turn down at a moments notice. Therefore, I will use the Dow Theory downside targets based on the price increase from the low of $33.23 in February 2003 to the high of $95.05 accomplished October 2007. The Dow Theory downside targets are:
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$64.14 (fair value)
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$53.83
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$33.23
It remains to be seen how much XOM continues to fall. However, based on the prior Coppock Curve indications, XOM is expected to remain unchanged or fall for another three to six months by about 11% to 18%. However, if you’re willing to buck the trend of the overall market, this stock will make for a great 3 to 6 year holding. Get your research in before the upcoming dividend payment and good luck.
If we were to invest in stocks the way that Charles H. Dow would then we would buy half of the intended amount now and purchase the second half if the price declines. For example, let's say that you wanted to invest $13,180 in this company. What you would do is buy $6,590 worth of stock now (approximately 100 shares) and hold the stock if the price goes up. If the stock goes down then you would invest the remaining $6,590 at the next level that you felt was ideal. This approach works well regardless of the market that you're in as long as you set aside the amount that you intend to invest before making the first purchase. Also, after making the first investment never invest the second half somewhere else.
The purpose of my research recommendations is to point out quality Dividend Achievers that have reached a new 52-week low. From this point begins the research to verify the quality of the stock for both short and long-term investing. These recommendations are within the context of the 3rd year of an 18-year secular bear market. A bear market that I expect to trade in a range between 16,000 and 5,000.
-Touc
Posted in Coppock Curve, investment observation, XOM