Reports and Commentary from the Investment World
Reports and commentaries are posted here on a regular basis.
BP PLC continued [2006-08-31]
BP PLC (BP:LSE)
BP has been a great long term performer in our Bulldog Portfolio. But we have had a hold rating on the shares this year, as they were too pricy to add more. However; in the last few weeks BP has been embroiled in a legal battle in Illinois, has suffered an oil spill in Alaska and a fatal explosion occurred in one of its facilities in Texas. Consequently the shares have suffered, falling below 600p for the first time in well over a year.
BP has made massive profits in the last year off the back of strong oil prices. It is a big blue chip with good management, excellent cash flow and earnings per share and a stable dividend yield. Its long term prospects are still very good. Once it has sorted out these recent issues, we have no doubt that BP shares will rebound.
Take this dip in its share price to buy BP shares if you do not have a holding already and if you want to add to your long term position, take this opportunity now to load up.
Below is a copy of our original report on BP.
BP p.l.c. is a huge United Kingdom-based energy company, operating in over 100 countries worldwide.
Its principal activities are finding, producing and marketing natural energy resources.
The Company comprises of six business segments: exploration and production, pipelines and shipping, refining and marketing, gas and power, petrochemicals and renewable and alternative energy.
BP’s product lines include BP, am/pm, Aral, ARCO and Castrol.
BP Amoco, is a vast company. It arose from the merger in 1998 of British Petroleum (English) and Amoco (American), which made it number three in the world in oil and gas behind Exxon Mobil (American) and Royal Dutch Shell.
BP Amoco operates in several fields:With reserves mainly in Alaska and the North Sea , the group is the American number one in oil and natural gas, its leading activity, which it distributes to different sectors, namely aviation, the navy, or business and industry.
A few figures suffice to demonstrate BP Amoco’s size: a daily output of 2.5 million barrels of oil (one barrel contains 159 liters) and 8.1 million barrels of gas, and it operates 30,000 gas stations throughout the world
.It is also highly successful in the refining sector, for example, selling 5 million barrels of fuel daily to petrol/gas stations.
And this is before we consider petrochemicals and specialty chemicals. BP Amoco also produces polyethylene, polypropylene and acetylene amongst others.
There are in total 52 production sites world wide, producing 25 million tons of products annually.
BP Amoco is also now becoming involved in the solar energy sector.
With a staff of almost 100,000, BP Amoco, undeniably a giant, is located in Europe , North and South America , Asia , and Africa .
At this point in time BP is trading for less than 400p. This has got to be a bargain price for such an energy sector behemoth.
BP at 371p is trading currently on a prospective P/Es of around 12 and offers dividend income of over 4%. This reliable blue chip stocks has not been this cheap for a decade!
BP has traded in a price range of 500p to 650p in the last 2 years, so at todays price it represents an extreme bargain.
In addition to its attractive share price and dividend yield, BP is in the Energy sector and this is the sector that I really like for the next few years.
Buy BP (BP:LSE) up to 450p and enjoy a 4% dividend whilst we await the share price revival.