Case Study Finance 100

The following case study was based on information I researched from April- June 2009. My company of choice for this project is Exxon Mobil. Their stock symbol is XOM. The company is engaged in the exploration, production, transportation and sale of crude oil and natural gas and the manufacture, transportation, transportation and sale of petroleum products. The company has an excess of 80,000 employees.

The industry is: Integrated oil and gas. The Companies website is www.exxonmobil.com. During my research, I found Exxon Mobil stock to be an excellent investment. The fifty-two week range 56.51-90.50 with and average dividend yield of 2.35% Exxon Mobil Corp operation includes exploration and production of oil, Gas & Electric power generation, coal and motors. Exxon Mobil also manufacturer and market fuel, lubricants and other chemicals.

They are involved with anything that has to do with Industrial and manufacturing. You almost cannot go wrong investing in their stock. It’s a good hold, or limited order stock to purchase. Exxonmobil is on schedule to regain the fortune 500’s number slot this year, despite some sharp fall in oil prices. With an economy in crisis, much of the industrial and manufacturing world depends on energy to exist. The airline and auto industries which make up most of the US work force, along with their suppliers. Every and anything happening within the US or abroad affects this market.

As an investor, not only the prospects are great for you to profit financially, you’re engaged with a company that constantly looking for avenues to effect social change around the globe. Two pressing questions for share holder; will congress pass a cap and trade law that would crush oil profits? Should Exxon mobile use its $131 billion cash pile to buy up smaller rivals with sunken stocks but attacks oil and gas reserves. If the forth quarter of 2008 demonstrates anything, it’s that Exxon Mobil is perfectly capable of making billions of dollars even with oil at $50.00 a barrel or less.

Chevron Corp and Exxon Mobil Corp were the Dows biggest weights as June oil future slid more than 5% on flu worries. Chevron was down 2% at $65.29, and Exxon gave up 1% at $65.29, and Exxon gave up 1% at $65.88. When crude rose from below $35.00 a barrel in March, boosting energy cost just as the U.S is fighting to emerge from a severe recession.

High oil prices over the last two years, which surged to a record $147 a barrel in July, helped undermine consumer demand and plunged the world into its worst economic slow down since World War 2. When oil goes to $60.00 while major economics are still struggling, those high prices will simply slow down an economy recovery. Back in May 2009, a series of lower forecast for world oil consumption undercut investor’s optimism that a global economic recovery was imminent. The international Energy Agency, the US Energy information administration and the organization of petroleum exporting countries all cut crude demand expectations.

The oil stock is affected by almost everything. If there’s a militant group destroying pipelines then oil prices goes up. If there’s talk about a disaster it goes up when energy share fall along with oil prices it creates panic.

References

1.CNNMoney.com 2.Motleyfool.com 3.Bloomsberg.com

Qualitative Analysis 1.Based on the financial information presented, is this company a good investment? Exxon Mobil regained the fortune 500 number one slot showing the strength of the stock

2.Would you recommend investing in this stock, and at what price? Yes I would recommend investing 60.00 per share as a good entry price. Right now crude oil has slipped below 69.00 Exxon Mobil gained 11 cents to close just last night at 68.95

3.Where are the key business and financial risks the company is facing in the future? As with all companies the World Bank announced on Monday at gloomy forecast that called for the global economy to contract by 2.9 % in 2009.

4.Was there any pubic ally disclosed information that you considered in your recommendation (e.g. press releases Exxon Mobil is behind a lot of new innovations i.e.: the electric car which should be coming to Baltimore shortly.