Robert Haddad Ashley Hughes AmirAli Motamedi Masoudieh

Transcription

1 Robert Haddad Ashley Hughes AmirAli Motamedi Masoudieh

2 Size and Composition Business and Economic Analysis Financial Analysis Valuation Analysis Recommendation

3 Composed of companies involved in the production and supply of energy 166 Energy Sector Stocks with >$1B Mkt Cap (non ADR) 39 Energy Sector Companies in S&P % of the S&P 500 $1.079 Trillion in Market Cap in S&P 500

4 Composed of companies involved in the production and supply of energy 166 Energy Sector Stocks with >$1B Mkt Cap (non ADR) 39 Energy Sector Companies in S&P % of the S&P 500 $1.079 Trillion in Market Cap in S&P 500

5 Telecommunication Services, 3.00% Utilities, 3.76% Materials, 3.44% Information Technology, 18.69% Consumer Discretionary, 10.12% Consumer Staples, 11.53% Energy, 10.69% Energy Sector S&P: 10.69% SIM: 9.07% 1.61% Underweight Industrials, 10.38% Financials, 16.31% Health Care, 12.09%

6 % SIM Under/Overweight S&P 500 As of 6/30/10 Utilities Telecommunication Services Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% Currently Underweight in Energy by 1.61%

7 SIM Stocks / Our Stocks Oil & Gas Drilling Oil & Gas Equipment & Services Noble Corp. National Oilwell Varco Inc., Cameron Int l, FMC Technologies Integrated Oil & Gas Chevron Oil & Gas Exploration & Production Oil & Gas Refining & Marketing Oil & Gas Storage & Transportation Coal & Consumable Fuels

8 Largest Companies Top Performers Company Stock Price Rank Market Cap (billions) Company 1 Yr Price Change Exxon Mobil Pioneer Natural Resources % Chevron Smith International 58.17% ConocoPhillips FMC Technologies 54.11% Schlumberger Sunoco 37.08% Occidental Petroleum EOG Resources 37.01%

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13 Oil Natural Gas Fossil Fuels Coal Electric Power Solar Wind Renewable Hydropower Nuclear Geothermal Bioenergy Fusion Hydrogen

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16 Current & Forecasted Oil Production Capacity Current & Forecasted World Oil Demand Current &Forecasted GDP Predominantly From Industrial & Agricultural Output Current & Forecasted Level of World Population and Number of Cars Current Estimates of World Oil Reserves The level of Political, Economical and Social Stability in Oil Producing Countries OPEC Decisions The Current and Projected Level of Investment Requirments Infrastructural Components of The Energy Sector

17 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Russia Saudi Arabia United States China Iran India Canada Mexico European Union Iraq Norway United Arab Emirates Kuwait Algeria Venezuela Brazil Angola Nigeria United Kingdom Kyrgyzstan Libya Kazakhstan Thailand Azerbaijan Indonesia Oman Qatar Malaysia Egypt Argentina CIA Factbook

18 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 United States European Union China Japan Russia India Germany Brazil Saudi Arabia Canada Korea, South France Mexico United Kingdom Italy Indonesia Spain Iran Netherlands Australia Singapore Taiwan Venezuela Belgium Egypt Thailand Turkey Argentina South Africa Malaysia CIA Factbook

19 300,000,000, ,000,000, ,000,000, ,000,000, ,000,000,000 50,000,000,000 0 Saudi Arabia Canada Iran Iraq Kuwait Venezuela United Arab Emirates Russia Libya Nigeria Kazakhstan Qatar United States China Algeria Angola Mexico Brazil Azerbaijan Sudan Norway India European Union Oman Vietnam Egypt Indonesia Ecuador United Kingdom Yemen

20 OPEC Bulleting

21 2009 World Oil Outlook

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23 World Oil Outlook 2009

24 World Oil Outlook 2009

25 World Oil Outlook 2009

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37 Threat of Entry(Low): Capital Intensive/ Regulations & Controls/OPEC power/government oversights Threats of Rivalry(Medium): Relatively low among OPEC members/ medium among publically traded or private companies Threats of Substitutes(Low Medium): In large scale currently no substitute in current energy portfolio but more diversification in energy in coming future Threats of Suppliers(Low): viewing suppliers as oil/petroleum equipment providers it is low to medium Threats of Buyers(Low): buyers hold not much power, it is traded in free market

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45 EPS 200.0% 150.0% 100.0% 50.0% 0.0% 50.0% 100.0% 150.0% 200.0% 50.0% 25.0% 0.0% 25.0% 50.0% Revenue Mean 8.9% Median 11.5% Mean 3.2% Median 2.6% Note : Above mean calculated without outlier (950% on far left)

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48 EPS 450.0% 350.0% 250.0% 150.0% 50.0% 50.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 10.0% 20.0% Revenue Mean 48.4% Median 12.2% Mean 15.9% Median 12.7%

49 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 10.0% Cons Discr. Cons Stap. Energy Financials Healthcare Industrials Info Tech Telecom Materials Utilities

50 Relative to S&P 500

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52 Energy Sector Valuation Overvalued by >10% Inline with S&P Undervalued by >10% Absolute Basis High Low Median Current % overvalued / (undervalued) P/Trailing E % P/Forward E % P/B % P/S % P/CF % Relative to SP500 High Low Median Current % overvalued / (undervalued) P/Trailing E % P/Forward E % P/B % P/S % P/CF %

53 Industry Valuations Oil & Gas Equipment/Services Overvalued by >10% Inline with S&P Undervalued by >10% Absolute Basis High Low Median Current % overvalued / (undervalued) P/Trailing E % P/Forward E % P/B % P/S % P/CF % Relative to SP500 High Low Median Current % overvalued / (undervalued) P/Trailing E % P/Forward E % P/B % P/S % P/CF %

54 Industry Valuations Drilling Relative to SP500 High Low Median Current % overvalued / (undervalued) P/Trailing E % P/Forward E % P/B % Overvalued by >10% Inline with S&P Undervalued by >10% P/S % P/CF % Exploration/Production Relative to SP500 High Low Median Current % overvalued / (undervalued) P/Trailing E % P/Forward E % P/B % P/S % P/CF %

55 Industry Valuations Integrated Relative to SP500 High Low Median Current % overvalued / (undervalued) P/Trailing E P/Forward E P/B P/S P/CF % 4.1% 10.0% 16.7% 14.3% Overvalued by >10% Inline with S&P Undervalued by >10% Refining/Marketing Relative to SP500 High Low Median Current % overvalued / (undervalued) P/Trailing E P/Forward E P/B P/S P/CF % 20.0% 50.0% 140.0%

56 Industry Valuations Oil Storage Relative to SP500 High Low Median Current % overvalued / (undervalued) P/Trailing E P/Forward E P/B P/S P/CF Coal Relative to SP % High Low Median Current % overvalued / (undervalued) 9.1% 0.0% 77.8% 0.0% Overvalued by >10% Inline with S&P Undervalued by >10% P/Trailing E % P/Forward E % P/B % P/S % P/CF %

57 Currently underweight by 161 basis points Recommend increasing weight by 211 basis points to bring SIM overweight relative to S&P500 by 50 basis points Demand for energy will increase with economic recovery, further growth in emerging market, expected reduction of energy sector systematic risk, still relatively cheap

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