Energy Sector
• Proposal:
Hold 125 Enron
Hold 400 Exxon
Hold 125 El Paso
YTD Performance
ExxonMobil Corp
Latest News:
• ExxonMobil confirms talks with Saudi
officials
• Oil shares slip back on price outlook
• U.S. majors consider Balkan pipelineproject head
Chart of Stock Price
Comparison of Major Four Oil
Companies
Key Figures
• P/E : 17.89
• Revenue Quarter vs
•
•
Year Ago : = -26.26
Market Cap : 266.1 B
nearest competitor
BP Market Cap of
183.3B
Enron Corporation – ENRNQ
Last 0.25
52 Week High 77.07
52 Week Low 0.12
• Needs to pay off debt
– Sell assets
• Can’t obtain credit so:
– Cancel current stock
– Reissue new stock under new
name
• North American energy trading
unit
• Possibly broadband unit
– Jarvis Entertainment Group
• Consequently, Enron issued a
– Receive royalties
• From Swiss Bank USB Warberg
– Operations
• Wholesale services
• Energy services
• Global services
• Full debt pay-off not likely
– .16 to .20 per dollar to creditors
– “No one expects to get paid”
•
statement essentially declaring its
stock is worthless
Recommendation : HOLD
– NDIC position in ENRNQ = $31.25
• Just “pocket change”
– Educational stock
– Doesn’t it feel good to see the
club’s worst performing stock of
all time every time we look at our
portfolio?
El Paso Corporation (EP)
Houston, TX
Industry
We chose this stock over competitors because
it is a strong, safe company that is still
expanding. Its principal operations include the
transportation, gathering, processing and
storage of natural gas; the marketing of
energy and energy-related commodities and
products; the generation of power; the
development and operation of energy
infrastructure facilities; and the exploration
and production of natural gas and oil.
The Numbers
• Current Price: $36.17
• 52 wk Range: 31.70-
• Earning Estimates:
•
•
•
• EPS: $0.10
• 5 yr Projected
75.30
P/E Ratio: 241.13
Mkt Cap: 18.46B
Beta: 0.6
– 2002: $3.38
– 2003: $3.75
Earnings Growth
– EP: 14%
– Industry 11%
El Paso Chart
Natural Gas Chart
Recommendation: Hold
• Company should
•
•
experience high
earnings growth for
its industry
Owns largest gas
pipeline in United
States
Brings diversification
to portfolio
Stock Ideas- Valero
*Dividend Yield: .40
*ROE: 27.6% v. 22.6%
*Refiners PE v. Market PE
60% avg., now 40%
*Consolidation, pricing
power
*Acquisitions
*Crackspread
Stock Ideas- Duke Energy Corp.
*Safe Play
*Dividend Yield: 1.1%
*Sales Growth v. Industry
20.7% v. 1.9%
*Better than industry on both
ROE and ROA, strong mgt.
Stock Ideas- Syntroleum
*Gas to Liquids Process
*Licensee agreements with
BP, Chevron, Daimler
Chrysler
*New news…..
Energy Sector
• Jason King- Team Leader
• Phillip Luijckx- Exxon Mobil Analyst
• Jason Kingery- Exxon Mobil Analyst
• Mike Murphy- Enron Analyst
• Mike Melby- El Paso Analyst
• Craig Oliver- El Paso Analyst