The 100 Best Stocks You Can Buy 2012 by Peter Sander & Scott Bobo

Author:Peter Sander & Scott Bobo [Sander, Peter & Bobo, Scott]
Language: eng
Format: epub
Tags: General, Business & Economics, Investments & Securities, Finance, Investing, Money Management, Personal Finance, Stocks, Stocks - Evaluation
ISBN: 9781440500534
Publisher: Adams Media
Published: 2011-11-18T17:55:09+00:00

Reasons to Buy

ExxonMobil and Apple Inc. vie for the number one and number two spots in total market capitalization, that is, the total value of shares outstanding. A decision to buy ExxonMobil over a company like Apple is essentially the decision to own a company with 23 billion barrels of oil equivalent in the ground and the means to bring them to market as high value add products, in contrast to owning a company with outstanding products, market acceptance, and innovation. It’s an interesting choice.

Exxon is a huge generator of cash, and they’ve used considerable amounts of that cash to buy back shares. Outstanding shares dropped from 6.1 billion in 2005 to an estimated 4.8 billion at the end of 2011. This is a significant move and long-term benefit for shareholders.

Finally, Exxon is the largest publicly traded oil company in the world, and in the oil business, there are strategic advantages that accrue to size. Having the resources to bring to bear on an opportunity can mean the difference between winning and losing an exploration or development award. Despite the company’s enormous size, it has managed to return double-digit growth over the past ten years in sales, earnings, and cash flow, although these might be tied more to energy prices than operational excellence.

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