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Is now the time to buy these FTSE 100 oil stocks?

first_img Dan Peeke | Monday, 12th October, 2020 | More on: BP RDSB I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Markets around the world are reeling from the coronavirus pandemic…And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Enter Your Email Address 5 Stocks For Trying To Build Wealth After 50 Like just about every sector in the world, oil stocks plummeted as a result of this year’s market crash. Since then, the share price of two of the FTSE 100’s biggest companies has followed a similar path.Both Royal Dutch Shell (LSE: RDSB) and BP (LSE: BP) took a hit in mid-March, before a rise at the end of the month. Aside from a shared spike on June 8th, the competing oil stocks have been on a relatively consistent downturn since then.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…But is this an opportunity to buy cheap, or the start of something worrying?Which Oil Stock To Buy?On one hand, BP is making a lot of progress. Oil stocks could be hit massively by changing attitudes to climate change, so the company’s commitment to increasing low-carbon investments by 1,000% in the next 10 years and becoming carbon-neutral by 2050 are promising for the long term.On top of this, it plans to cut costs by $2.5bn by the end of 2021, with a halving of its dividend and the reduction of 10,000 jobs already having contributed to this. Its debt is also down by an impressive $10bn since Q1.Having said this, BP’s second-quarter earnings were, like most oil stocks, poor. In comparison to a $2.8bn profit during the same period a year earlier, the company reported a loss of $6.7bn. This is reflected in a share price reduction of 26% since the publication of its Q2 results, and a 56% reduction in the last 12 months.BP’s third-quarter trading update is just around the corner, so we’ll soon get an insight into the implications of a turbulent summer.Cash Flow PositiveLike BP, Royal Dutch Shell had a rough second-quarter, so its reported earnings paint a grim picture. A loss of more than $18bn and a $3bn debt increase between Q1 and Q2 2020 certainly didn’t help its share price. As a result, it has dropped by around 10% since the results were released, while it is down 56% over the last year, just like BP.Understandably, Paul Summers views Shell as a risk, but I’m a little more positive about the future of oil stocks and this FTSE 100 giant.  The company is doing well to reduce costs, including reducing its OPEX (operating expenditures: the day-to-day running of the company) by $1.1bn in comparison to Q1, and reducing its CAPEX (capital expenditures: long-term developments) by $1.4bn in the same period.This has helped contribute to a positive cash flow of $243m, with CEO Ben van Deurden providing the confident suggestion that its “high-quality integrated portfolio, disciplined execution and forward-looking strategy enable sustained competitive free cash flow generation.” The performance of oil stocks is always tough to predict, but Shell seems to be moving in the right direction. Its Q3 results will also be released at the end of October.On The WholeDespite the current decline in their share prices, both of these oil stocks seem like promising investments that are in good enough health to weather a potential second lockdown and recover well.However, with its commitment to green energy and a slightly steeper recent fall in share price, I think an investment in BP at this low price has the potential to provide better returns with more long-term safety than Shell.   Image source: Getty Images. Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. Is now the time to buy these FTSE 100 oil stocks? Click here to claim your free copy of this special investing report now! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. See all posts by Dan Peekelast_img read more

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