Tuesday, December 07, 2010

STO = Something to Own

STO came up in my search for undervalued stock with upside potential in mid October. Over the last eighteen months the stock price has found support at the 18.50 level. During the past two trading sessions it has crossed above both the 50 dma and the 200 dma.

Statoil ASA (STO) engages in the exploration, production, transportation, refining, and marketing of petroleum and petroleum-derived products. The company involves in the exploration, development, and production of crude oil and natural gas in Norway and internationally, as well as extraction of natural gas liquids. It also transports and markets natural gas and natural gas products; and operates 2,000 full-service stations in Scandinavia, Poland, the Baltic States, and Russia.

Positive aspects are:

1. Early developing chart pattern. Recent break up above the 50 dma and 200 dma.
2. Price support at 18.50, limiting the downside exposure.
3. Good average daily volume of about 1.7 million shares.
4. Estimated earnings are on the rise.
5. Forward P/E ratio is at about 9.
6. Dividend is at 3.6%.
7. Number of funds owning STO has increased over the last 4 quarters.

With yesterday's closing price at 21.88, STO may be worth owning.

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