2024-05-18 06:26:50 ET
Summary
- ConocoPhillips is the largest independent oil and gas producer in North America, with a focus on the Permian Basin.
- The company's long-term investment strategy is based on growth in well-established reservoirs, primarily in North America.
- ConocoPhillips has a track record of operational excellence and countercyclical capital allocation, making it a low-risk investment over the long term.
ConocoPhillips ( COP ) is the largest independent oil and gas producer in North America. Unlike its major integrated peers, the company has no downstream processing capacity which exposes it to the whims of energy markets to a great degree. During periods of commodity price strength COP is expected to do particularly well and underperform when the markets turn, just like we have seen over the past month. This business is risky you might conclude, but for those seeking to hold their stocks long-term, - risk is not defined by volatility.
Yes, COP might be volatile over the shorter holding periods. Over the past three years, oil prices have been appreciating and, as could be expected, the stock has outperformed the integrated majors. Short-term traders should sell COP and buy integrated majors if they expect oil prices to continue going down. Unfortunately, we do not have a crystal ball to tell us where oil prices are going within the next few months, and therefore we choose to ignore the short-term volatility and focus on structural long-term value growth drivers and fundamental risk factors....
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For further details see:
ConocoPhillips: Delaware, Willow And The Decade Of Low-Risk Growth