The share market is liquid and volatile. Investing is like trying to hit a moving target. One has to adjust target prices either to take profit early or just hold on and be patient. This has happened to me countless number of times but most recenly with ExxonMobil. As i came across a very interesting article by Alexander Valstev on Seeking Alpha. The article analyses market value and comes up with a fair value for Exxonmobil, XOM. (found here)
I had initially bought XOM below $75 back in 2011 right after the flash crash; with a target price of $94 for my exit strategy. After reading the article by this gentleman, i think i need to re-assess my target price to $116/share for 2 reasons mainly:
1. Analysis done was very convincing
2. Market has just gone through re-tracement
If you followed my previous post, I strongly believe that we have not reach the climax, the top or the breaking point which will be followed by the next big crash. Oil prices have been steadily rising (Crude Oil now @ $106.70) and i suspect it will continue to rise to levels of $140-$160 a barrel by the end of this year. Therefore oil producing companies are going to benefit for the rest of 2013.
Could there be other factors influencing this rise? most definitely yes. Political situation in the middle east isnt getting better but regardless of what happens in Syria and Iran, we should see a pick up in trade around the region and rising short term demand in Oil.
To wrap up my price target for XOM, i have to agree with Mr. Alexander, XOM is one of the most well run companies around the world, currently undervalued. It has been trading between below by $94 initial target price because of external factors; one could even say it is because of current mood of investors: FEAR!
I had initially bought XOM below $75 back in 2011 right after the flash crash; with a target price of $94 for my exit strategy. After reading the article by this gentleman, i think i need to re-assess my target price to $116/share for 2 reasons mainly:
1. Analysis done was very convincing
2. Market has just gone through re-tracement
If you followed my previous post, I strongly believe that we have not reach the climax, the top or the breaking point which will be followed by the next big crash. Oil prices have been steadily rising (Crude Oil now @ $106.70) and i suspect it will continue to rise to levels of $140-$160 a barrel by the end of this year. Therefore oil producing companies are going to benefit for the rest of 2013.
Could there be other factors influencing this rise? most definitely yes. Political situation in the middle east isnt getting better but regardless of what happens in Syria and Iran, we should see a pick up in trade around the region and rising short term demand in Oil.
To wrap up my price target for XOM, i have to agree with Mr. Alexander, XOM is one of the most well run companies around the world, currently undervalued. It has been trading between below by $94 initial target price because of external factors; one could even say it is because of current mood of investors: FEAR!
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