TheStreet.com's Jim Cramer says the companies could deliver money to shareholders without sacrificing growth.
What happens if the oil companies start actually recognizing their good fortune -- their sustainable good fortune -- and start boosting dividends the way that Tidewater (NYSE: TDW) (Cramer's Take) did last week with its 67% hike.
Throughout this great run with oil and gas, it seems that the companies themselves haven't caught up with the good fortune. They haven't spent that much on drilling relative to profits, and they have chosen to buy a lot of stock back, never bad. But what if they start returning the profits to shareholders in the form of dividends?
TheStreet.com's Jim Cramer says lots of companies now thrive with crude up here.
Oil's not a tax on everything -- it's a tax on the consumer. That's what I come down to when I see the charts this weekend and ponder what's happening in so much of industrial America.
Company after company that I examine -- the new techs, as I call them -- actually benefit from higher oil prices. Or they can pass them on with ease, because of the worldwide demand being so strong.
Take all of the companies involved with making a Boeing (NYSE: BA) (Cramer's Take): Boeing itself, Alcoa (NYSE: AA) (Cramer's Take), Honeywell (NYSE: HON) (Cramer's Take) and Precision Castparts (NYSE: PCP) (Cramer's Take) being good examples. Each of these is necessary because the new Dreamliner burns lots less fuel, and with fuel the biggest airline cost, it stands to reason that higher energy prices make the plane more desirable even at a higher price point.
The record run of oil, already up a gaudy 400% since 2000, continues, with prices breaking through $122 per barrel on Tuesday, May 6, 2008.
Meanwhile, gasoline prices, up about 20% in the past six months alone, and about 100% in the past four years, show few signs of moderating in the months ahead.
It's the era of high oil/energy prices, and until a readily-available, affordable energy substitute is found and/or oil prices decline, the oil / oil services sector will be in demand, which bodes well for Occidental Petroleum Corporation (NYSE: OXY).
It really shouldn't come as too much of a surprise that the company was able to rake in strong earnings considering just how high oil prices were during the fourth quarter. Occidental had been expected to show earnings this morning of $1.69 and surprised Wall Street with actual earnings of $1.74.
For the full year, the company posted its strongest ever yearly numbers. The full year profit came in at $5.4 billion, which is 28.9% higher than the $4.19 billion profit that the company realized in 2006.
Shares of were trading near record highs when ConocoPhillips (NYSE: COP) started off the new year by announcing that it expected fourth quarter production results to exceed those of the third quarter. But it was good news/bad news for the company this past week.
The good news: The Wall Steet Journal reported that Conoco was now the front-runner to participate in a multiyear, $10 billion project to develop the Shah natural-gas field in Abu Dhabi, beating out such rivals as Occidental Petroleum (NYSE: OXY) and Royal Dutch Shell (NYSE: RDS.A). Abu Dhabi National Oil Co. had been expected to name a partner for the project last year, and oil companies have become frustrated by the delays. Abu Dhabi is trying to meet rising demand for natural gas, which has surged with the building of gas-fired power stations and desalination plants.
The bad news: The company's donation of $5 million to a local cancer center apparently did not impress Alaska state officials sufficiently to allow Conoco to go forward with its nonconforming proposal for a natural gas pipeline project in that state's North Slope. Conoco's proposal had requested that state taxes be fixed on the project for decades, which prompted Governor Sarah Palin to send Conoco a rejection letter. The rejection left TransCanada Corp. (NYSE: TRP) as the sole finalist for the project.
Conoco shares have fallen 5.96% since the beginning of the year, and closed Friday at $83.04.
Akeena Solar, Inc. (NASDAQ: AKNS): A recent licensing deal is still pushing shares up. It hit 52-week high of $15.65 against period low of $2.97.
Teva Pharmaceutical Industries Ltd (NASDAQ: TEVA): TEVA recently got an FDA green light on new generic nausea drug. It's up to $49.08 from 52-week low of $30.81.
Superior Energy Services, Inc. (NYSE: SPN): Superior won a major contract to repair Gulf drill rigs. It jumped to $44.70 from 52-week low of $28.20.
Monsanto Company (NYSE: MON): Monsanto posted outstanding financial results. It traded up up to $123 from 52-week low of $49.10.
Occidental Petroleum Corporation (NYSE: OXY): The market is mad for energy stocks. This one climbed up to $80.93 from 52-week low of $42.06.
Douglas A. McIntyre is an editor at 247wallst.com.
Hess (NYSE: HES) closed at a record high of $104.40 Wednesday. WTI Crude futures are down 0.30% to $95.68 according to Bloomberg. HES overall option implied volatility of 46 is above its 26-week average of 38 according to Track Data, suggesting larger price risks.
Occidental Petroleum (NYSE: OXY) closed at record high of $78.06 Wednesday. OXY operates in two segments: oil-gas and chemicals. OXY has a market cap of $64 billion with long-term debt of $1.7 billion. OXY overall option implied volatility of 34 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
TheStreet.com's Jim Cramer says names in this group are now trading vehicles, not long-term investments, but that doesn't mean they're any less critical to own.
Here we are again in the weeklong pullback in oil where the stocks all get thrown out and no one wants to touch them. We will soon hear from the chartists (as I call technical analysts) that these stocks were unable to take out their highs, or they are getting the right -- and cold --shoulder.
Citigroup upgraded US Steel Corporation (NYSE: X) to Buy from Hold and raised their target to $118 to reflect operating catalysts and their expectations for domestic steel markets to improve in Q4 and 2008.
Cooper Companies Inc (NYSE: COO) was also upgraded to Buy from Hold at Citigroup despite the lowered guidance as they believe the company's products are improving and earnings upside is possible.
WestLB upgraded Continental AG (OTC: CTTAY) to Buy from Hold after the tire marker announced plans to reorganize its company structure into six divisions following the purchase of Siemens AG's (NYSE: SI) VDO automotive unit.
MOST NOTEWORTHY: Linear Technology Corp (LLTC), Anheuser-Busch (BUD), Best Buy (BBY), Bankrate (RATE) and Ensco International (ESV) were today's more noteworthy downgrades:
Linear Technology Corp (NASDAQ: LLTC) was cut to Sell from Neutral at Merrill citing slowing revenue growth and valuation...
AG Edwards downgraded Anheuser-Busch (NYSE: BUD) to Hold from Buy on valuation...
Goldman said Best Buy's (NYSE: BBY) fundamentals remain at risk after the Q1 report and cut shares to Neutral from Buy...
Exxon Mobil Corp. (NYSE: XOM) opened at $83.96. So far today the stock has hit a low of $83.80 and a high of $84.42. As of 10:50 this morning, XOM is trading at $84.17, down $0.05 (-0.1%).
The stock has been climbing steadily over the past three months, hitting a one year high of $84.32 in late May. Jim Cramer believes oil is a great group right now. Last week's jumps were due in large part to mutual funds adding the stocks, driving prices up. But Cramer still calls stocks like XOM, Chevron Corp. (NYSE: CVX), ConocoPhillips (NYSE: COP), and Occidental Petroleum (NYSE: OXY) cheap, and a "great place to be." With XOM struggling a bit today on mixed action in crude oil futures, it may be a good time to go bargain buying. Recent technical indicators for XOM have been bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $70 range. XOM hasn't been below $70 for more than a day or two since October and has shown support around $79 recently. This trade could be risky if crude oil prices retreat sharply, but even if that happens, XOM has bounced around $70 three times in the past six months.
Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in XOM, OXY, or COP. Brent does control a long hedged position in CVX.
MOST NOTEWORTHY: ValueClick, Inc (VCLK), aQuantive, Inc (AQNT), Cigna Corp (CI), Warner Music Group (WMG), Clear Channel Communications, Inc (CCU) and Medtronic, Inc (MDT) were today's more notable downgrades:
Baird cut ValueClick Inc (NASDAQ: VCLK) to Neutral from Outperform, citing the FTC inquiry.
aQuantive (NASDAQ: AQNT) was downgraded to Sell from Buy after the company was acquired by Microsoft (MSFT) and because aQuantive no longer trades on fundamentals. Kaufman and Gabelli also cut aQuantive to Hold from Buy.
Cigna (NYSE: CI) was downgraded at Prudential to Neutral from Overweight on valuation.
Warner Music Group's (NYSE: WMG) downgrade to Sell from Neutral at Pali Research was based on the lower industry outlook, which Pali believes revenues are likely to fall at least 10% for the industry in 2007, along with the company's release schedule.
Bear Stearns downgraded Clear Channel Communications (NYSE: CCU) to Peer Perform from Outperform on the acceptance of the higher bid.
Medtronic Inc (NYSE: MDT) was downgraded to Underweight from Equal Weight at Morgan Stanley...
The Alien Tort Statute dates to George Washington's era. Today, however, it worries some executives in charge of global operations. Their concern: the 18th-century law could make contemporary business liable at home for the bad behavior of their employees around the globe.
Are violence and murder part of global business? Some overseas labor leaders say yes, and they're suing American companies in U.S. courts. Several lawsuits alleging violation of the revolutionary era law are awaiting trial in federal courts, according to an article in USA Today.
"The lawsuits have set up a showdown over whether boardrooms in the USA should pay big-money verdicts for crimes not prosecuted in countries where corruption and violence are often seen as a cost of doing business," writes Alan Gomez.
TheStreet.com's Jim Cramer says the companies could deliver money to shareholders without sacrificing growth. 
Oil and Gas giant 
Shares of were trading near record highs when 
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