January 26th, 2021 | 14:27 CET
Saturn Oil & Gas, Exxon Mobil, Nokia: A world without oil is still a long way off!
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Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Saturn Oil & Gas - on the leap to the next league
The small Canadian oil producer from Saskatchewan is currently suspiciously quiet. Presumably, the Company has been in strategic negotiations for several months and plans a change within the group. For this purpose, management hired strategy consultant Jean-Pierre Colin at the beginning of November. Colin has had a broad "oil career" at the international level and has been involved in negotiations on commodity strategy within the Canadian government and prominent political figures.
Without suspecting a storm is on the horizon, one can assume that well-paid consultants are only brought on board with specific intentions. Operationally, things continue to go well, with Saturn currently producing about 700 barrels per day. The price of WTI has risen by a good 25%. Since the rise, the difference to the operating production price of approximately USD 12 has been much more fun again. An expansion of the existing properties in the immediate vicinity would enable considerable synergy and volume effects in the refineries' resale or supply contracts.
Those who believe that after a serial inoculation against Covid-19 global economies will quickly return to business as usual can still stock up on oil stocks at very reasonable prices. Most major oil stocks are still over 50% off their 2016/2017 highs. While it is now known that 2018 will go down in history as the top year for tourism, only 50% of all ships are currently moving on the world's oceans. After the oil demand fell more sharply in the short term, when the supply was subject to a cut, the market is still struggling with overproduction.
Nevertheless, the environment is clearing up, especially for the smaller suppliers, who have an unfavorable situation, little liquidity, and excessively high production costs. Saturn combines exactly these points as thick advantages for itself: the location in the raw material country Canada, the low production costs, the lean company structure and the expansion potential in the near future. These are all the best strategic factors for a forward development, which the current share price of CAD 0.12 and a market value of EUR 18 million do not reflect at all. Expect some surprises in the near future!
Exxon Mobil - The oil giant plans cautiously
The history of Exxon Mobil in Germany began in Bremen in 1890 with Deutsch-Amerikanische Petroleum Gesellschaft (DAPG, later renamed Deutsche Esso GmbH) to operate Standard Oil's petroleum business in Germany. In 1999, the two American companies Exxon Corporation and Mobil Corporation, merged to form Exxon Mobil Corporation. The Esso and Mobil subsidiaries in Germany were merged in 2000 under the umbrella of the newly formed ExxonMobil Central Europe Holding GmbH, based in Hamburg. An international oil giant and a blue-chip on the stock exchange had been created.
Exxon Mobil has been generating high profits for several years and was therefore regularly among the most valuable companies in the world, according to the Financial Times Global 500. The Company's total market capitalization was USD 343 billion at the beginning of 2017, which was its last peak. With the decline in oil prices since 2018, the value dropped to its current level of about USD 200 billion. It is still on the FT list of stock market giants even now, but Exxon has already had to give up more than 50 spots to younger tech companies.
The Company's revenue fluctuates wildly; last year, it was about USD 215 billion, according to estimates, and its operating profit shrank from what used to be more than USD 45 billion to about USD 20 billion. Exxon has now become more cautious in its planning and has undergone a minor downsizing. Capital expenditures now amount to only USD 20-25 billion, and defacto dividends can now be paid from an oil price of USD 45. However, the cash flow yield only becomes interesting again above USD 70. Exxon Mobil is currently a clear economic play for better times after the pandemic and emerging economic activities. At the moment, you definitely need more breath.
Nokia - The Finns are back in the game
Nokia first became famous with the production of wooden articles and rubber boots. Later, it advanced to become a high-tech company in mobile networks and became a real competitor to the traditional league of Ericsson and Siemens. The excursion into the cell phone era succeeded very well with excellent basic models up to the classic phone point. The smartphone generation destroyed the future; even the small cooperation attempt with Microsoft failed due to the lack of a modern operating system. Nokia's share price lost over 90% from its highs at the turn of the millennium. Now Nokia is back with a new lineup!
The Company had fundamentally repositioned itself with two significant transactions in 2013. First, Nokia acquired Siemens' stake in the former Nokia Siemens Networks joint venture at the end of a profound restructuring. Second, the sale of all major Devices and Services businesses to Microsoft was announced. Since then, Nokia has been operating three business areas: mobile broadband networks, cartography, and mobile IT technologies.
Nokia has now been able to double its revenues again since 2013 to EUR 24 billion, and net income is expected to be positive in 2020. At present, banks are overflowing with new recommendations for Nokia shares, which is fueling the recent substantial rise in the share price. The reason: The operational turnaround has now been revealed - things are looking up again. Yesterday alone added a 14% price gain. Since the March low, the share has now gained 85% to EUR 3.92. With the European technology sector having weathered the Covid-19 storm well so far, Nokia's positive structural and cyclical momentum should continue into 2021. The market is now expecting a small dividend of around EUR 0.45 again - i.e., that is 1.2%. The Finns are back!
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