ConocoPhillips Reverses Strategy to Attract Investors
Kurt Wulff (McDep Associates) submits:
Buy-recommended ConocoPhillips (COP) offers unlevered appreciation potential of 65% to a McDep Ratio of 1.0 where stock price would equal Net Present Value (NPV) of $105 a share. Fourth quarter results released today matched our estimates from three months ago for unlevered cash flow (Ebitda) while exceeding both the third quarter 2009 and fourth quarter 2008.
Lower than expected costs in the strengthening upstream segment helped offset a loss in the cyclically weak downstream (other) segment. NPV appears well supported by cash flow and reserve life in our valuation of COP in an industry context. Put into the McDep Ratio framework, COP appears to be the most undervalued of large cap North American and European stocks in our coverage.
Investing, Long Term Investment, stock market | admin March 2, 2010
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