MUR

[Ramsburg]

MUR - Murphy Oil Corp.

*** A full trade plan will be given in the next hour or so.***

We will be buying MUR today around the open

[Ramsburg]

Murphy Oil Corp. (MUR)

Profile: Murphy Oil Corporation. The Group's principal activities are to explore, produce, refine and market oil and gas. It operates in two segments: Refining and marketing and Exploration and production. The Refining and marketing segment consists of refining crude oil and other feedstock into petroleum products such as gasoline and distillates. It also buys and sells crude oil and refined products and transport and market petroleum products. The Exploration and production segment explores and produces crude oil, natural gas and natural gas liquids. The products are marketed under the brand name of Murphy USA (R) and SPUR(R). The Group operates in the United States, the United Kingdom, Canada, Malaysia, Ecuador, Spain and other foreign countries. On 01-Dec-2007, the Group acquired remaining 70% interest in the Milford Haven, Wales, refinery in the United Kingdom.
Sector: Oil & Gas Refining & Marketing
Market Cap: $17.83B
Website: http://www.murphyoilcorp.com/


Technical Analysis:

MUR is bullish in all time frames, both 50-EMA and 200-EMA with strong positive leaning and trading interesting volumes.
Currently MUR is consolidating the last breakout and still trading near the support levels:
- Ascending support @ $90
- 50-EMA @ $89.75

Short Term Chart:



Long Term Chart:



With this kind of technical layout I expect a breakout into new highs anytime soon while the downside risk remains small.

Fundamental Analysis:

MUR is a big cap, positioned in the hottest sector right now; it has a strong balance sheet and soundly fundamentals.
Current 2008FY EPS consensus estimates is $8.70, and 2009FY EPS is $10.08, what makes MUR to be trading at just 10.7 times earnings (2008) and just 9.2 times earnings (2009), not overvalued at all.

Even so, I expect these estimates to be consistently upgraded soon, just by looking into the latest reviews, here’s a detailed estimates sheet with dates of last updates:



There is a trend of recent upgrades, probably just based on adjusting the crude oil prices and not even considering other factors; it’s expectable to watch more of this.

I’ve had the chance to read a recent research note from Goldman Sachs a few days ago, justifying a recent upgrade to MUR, analysts at Goldman estimate a $10.47 EPS for 2008 and they have a $115 price target right now (I’m expecting this target to be upgraded as well).

Here’s the complete note of research:


Trading Thesis:
This is mainly a sector play, while I’m bullish on this sector; I’m trying to add a few new picks with strong fundamentals within the sector to better adjust our diversified portfolio.
MUR has strong technicals and strong fundamentals, with the current layout on this sector, I think we have maybe 25% to 40% upside potential in play against just 10% of downside risk.

Trading Plan:
HOLD MUR

Regards,

[Ramsburg]

Update:

Yesterday was not a good day for oil related stocks in general, as the crude oil futures were down more than 3%, with that said our entry timing was a bit compromised, but even so nothing was changed on the current bullish layout.

Also relevant: Goldman Sachs just upgraded their price target for MUR to $132 back from $115.

I’m setting a stop level slightly below the 50-EMA and below the last relative low:

The trading plan is:

Trading Plan:
Hold MUR with a stop @ $86.50

Best regards,

[Ramsburg]

Update:

Another interesting candle for MUR, the current chart pattern looks great, MUR reacted positively on its ascending support and 50EMA, and is now set for another breakout (current short term descending resistance located at $95).

ValueEngine Research, just issued a positive buy for MUR with a price target of $118.56, and La Jolla Economics gave MUR a Strong Buy with the highest score among several players on this sector.

Trading Plan:
Hold MUR with a stop @ $86.50

Best regards,

[Ramsburg]

Update:

No technical changes for MUR, as it continues to trade inside this consolidation range, standing above the support level.

Like HES, MUR was also upgraded by Deutsche Bank:

27 Jun 2008 - 02:53:14 AM EDT
Deutsche Bank's Chief Energy Economist Adam Sieminski has changed the
oil price deck from our old long term view of $85/bbl to $100/bbl. For additional
details of the commodity price change please see our note today
entitled, "Oil price upgrade- What worked works and keeps working". We
are raising our 2008 EPS from $7.98 to $10.85, raising the price target from
$104 to $120, and maintain a BUY rating.

Comparing with other research departments, DB is still very conservative, but the bottom line is that upgrades are coming as expected, so we could easily watch a breakout of the current pattern at anytime.

Trading Plan:
Hold MUR with a stop @ $86.50

Best regards,

[Ramsburg]

Update:

MUR just broke out its consolidation pattern, and its near all time highs. The current developments for Crude Oil prices should boost it into new territory.

Trading Plan:
Hold MUR with a stop @ $86.50

Best regards,

[Ramsburg]

MUR stopped @ $86.50