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Tonyforever's avatar

Hi Arjun,

Thanks for another excellent column. I clearly remembered that many Wall Street analysts put out sell rating on XOM in 2020, One of their main arguments was that XOM spent too much on CapEx, which was also a point raised Engine #1 in the spring of 2021. The idea that investing counter-cyclically seemed to be lost to those analysts. One deep impression your articles have given to me is to look at the ROCE of an energy company. According to this chart published on Seek Alpha, the ROCE of XOM on twelve-trailing-month basis was already 36.7% as of the end of 3Q2022 (https://static.seekingalpha.com/uploads/2022/11/8/48844541-16679307177203414_origin.png). XOM's counter-cyclical investment is one of the important factor for such a high ROCE. But given your experience, how high do you think XOM's ROCE can go?

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john.dentice's avatar

Thanks Arjun.

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