With shares of Chevron Corporation (NYSE:CVX) trading at around $108.46, is CVX an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Chevron has been the center of much news recently. Most of it has been good news. Chevron has reached a potential settlement of $149 million in relation to an oil spill off the coast of Brazil in 2011. In Ecuador, there is a bigger story. A $19 billion dollar settlement is being sought, but this is most likely a fraudulent case. Chevron has never operated in Ecuador and is highly confident that it has been falsely accused. There is no evidence that Chevron did anything wrong, and nothing pertaining to this case is enforceable in any court of law. Amazingly, at least one plaintiff didn’t even know she was a plaintiff. There is also a good chance that the damages report was ghostwritten. In a nutshell, it’s an illegitimate case against Chevron as well as nothing any investor should worry about.
Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.
In 2013, Chevron plans on spending $37 billion in oil exploration on a global scale. Therefore, there is plenty of potential for growth. By 2017, Chevron would like to increase oil and gas production to 3.3 million barrels per day. This is an obvious attempt to keep pace with the larger companies in the industry. While not as big as an Exxon Mobil (NYSE:XOM), Chevron is working on becoming just as diversified.
The above points are important, but there is much more to explore when it comes to the story of Chevron.