Blue Monday and BP

Now it was such a slow week last week that nothing really jumped out at me indicating a buy except for BP. Coincidently I bought some BP shares last week. Today I thought I would be lazy and just post an email exchange discussing BP.



Hi Again

Did you know today is known as Blue Monday, cause it is the now that we all [ not included !] stop our new yrs resolutions... and also feel in need of a change of direction [ not me...!].

Last chatted to you about Cairn Energy / Tullow Oil. Cairn Energy is a great company, but think of the prospects that will catapult BP with the earnings growth over the next 2years or so from both the oil find in Gulf of Mexico and also demand being currently at $78... GS predicts a yrs end of $100.

BP shares are trading on a December 2010 earnings forecast of 9.7 times, falling to 8.6 in 2010. Shell shares are trading on a current-year multiple of 8.8 falling to 7.8 in 2011 and yielding 5.7%. Because of future production growth – and a still-attractive dividend yield of 5.6pc, I would buy BP, not because I have held them for nearly 8years, but cause of the growth and also the lower movement in any dowturn. E.G. Lets say I have 1400 BP shares which were bought at around 450p back in 2003. They have hit a high of 712p in '06, I have had the opportunity to buy more with the dividends, plus if the


BP plc value of 1400 at 650p before drop was £9500 dip to 376p would be £5760

RDS value of 1400 at 2128p before dip would be £29,792 to 1280 would be £17,920

Both have nice dividends but growth is better at BP...



Hi Scott

Now funny you mention BP. I actually bought £2k of BP last week. My sentiment was much the same as yours.

I bought Cairne with the prospect of higher oil prices in the new year. BP had been flashing as a buy at the same time. However, it looked expensive. Now this is the old adage in deciding a price to getin. Is it too overpriced or is the price representing value.

Now about blue monday and breaking new years resolutions I cant say I made any resolutions this year business as usual