This is my 2nd DD post for hidden gems. My previous call was on MTY which rallied by over 12% since my last post.
Here's a second one for ya'll. Imperial Oil (an integrated petroleum company majority-owned by Exxon-Mobil).
Here's a second one for ya'll. Imperial Oil (an integrated petroleum company majority-owned by Exxon-Mobil).
- Why you should invest:
- Expectation of recovery in industrials which will lead to increased consumption of petroleum products.
- P/B at 0.71, stock currently below book value, with the industry average at 1.52 P/B.
- P/E at 10.16, integrated oil industry P/E average at 14.0. Massively undervalued compared to the industry.
- While they suffered a loss of 188million in Q1 2020 due to the OPEC spat, they have sizable cash reserve of over 1.7billion dollars and a quick ratio of 1.05. They are equipped to survive for the long haul.
- If you're into dividends, they're still paying dividends all the way up to March at 0.76/share.
- Risks:
- V-shape recovery turns into a L-shape recovery and it turns into a long winter.
- Continued tension between Saudi+ Russia and the US O&G pushes oil back below breakeven price again (approx- $36/bbl)