NEWSLETTER
Billionaire investor and head of Berkshire Hathaway Warren Buffett recently accumulated in oil actions, such as BP (LSE: BP.) He has been arriving at the headlines.
News arose that Elliott Management has created a BP participation worth about £ 3.8 billion. The coverage fund urges the company to download some of its green energy goals and return its focus on oil and high profit gas. Did anyone say “Drill, baby, drill“
Warren Buffett may not be such an open activist. But he has only put another $ 409 million from Berkshire money Western oil. Berkshire now has huge 28% of the $ 45 billion oil giant. If you invested in the United Kingdom stock market, I can't help thinking that you could be looking at the BP assessment today.
Fall earnings
The price of BP shares increased 6.5% since the Elliott Management News broke. But a 61% drop in the earnings of the fourth quarter reported on February 11 might not make it look like a purchase of oil that screams.
For full year 2024, rival Shell He published revenues of $ 284 billion, while BP reached $ 189 billion. That puts Shell 50% ahead on the income front, but its market capitalization is more than double BP. And the tight ebitda of Shell by 2024 arrived at 73% ahead of BP.
That is based on a single snapshot in a volatile market in a moment of economic change. But about this, certainly simplistic, it does not seem that BP has done it as good for its shareholders as Shell.
A person who says he is familiar with Elliott has said that analysts believe BP is destroying the value.
Cheap oil
We are seeing a price ratio ratio (p/e) for BP of 10 by 2025, with analysts who expect it to immerse around 8.4 in 2026. The shell is in similar direct assessments, from nine falls to around 8.1. With decent dividend yields, those could be tempting valuations. I think the perspective could favor Shell right now, but a little fresh activism could change that.
An observer, Marketscreener, even believes that Elliott could have a fusion between BP and Shell in mind. It is a sector without competitive advantages between product offers: oil is oil, gas is gas. It is possibly the industry in which consolidation makes more sense.
If we are talking about potentially cheap oil stocks, we cannot ignore things itself. And that is a possible inconvenience, since the hopes of President Trump to make the oil taps sprout could send the price of a barrel. It is currently a little more than $ 70, and has been falling so far in 2025.
Investor considerations
Elliott's interest could obtain BP in a more profitable short -term base. And although it can be an industry promoted by politics, a single presidency may not mean much in the coming decades. Whatever we think about the current version of the US administration about the lack of oil business restrictions, it is Trump's final turn behind the wheel.
The Warren Buffett approach has to have to do with the long -term future of oil, and he is optimistic. I am less safe and much less knowledgeable, so I will sit and enjoy looking.
(Tagstotranslate) category. Investing
