Total Ranks 5th in the Top 10 Integrated Energy Stocks
Total stock performance in 3Q17
Total (TOT) stock ranks fifth in the list of the top ten integrated energy stocks being compared in this series. Total stock is the second stock in the middle tier. Total stock ranks just below Chevron (CVX), which we discussed in the previous part.
Total stock has risen 8.5% since July 3, 2017, outperforming the broad market indicator, the SPDR S&P 500 ETF (SPY). This ETF has risen 3.3% in the same period.
Interested in TOT? Don't miss the next report.
Receive e-mail alerts for new research on TOT
Total’s moving averages
In 3Q17, Total’s 50-day moving average (or 50-DMA) has crossed over its 200-day moving average (or 200-DMA), which is a positive technical indicator. TOT’s 50-DMA stood 3.4% above its 200-DMA on July 3.
However, as Total stock declined at the end of 2Q17, its 50-DMA broke below its 200-DMA in 3Q17. With the rise in Total stock in 3Q17, its 50-DMA crossed over its 200-DMA.
However, TOT’s 50-DMA stands just 0.6% above its 200-DMA. In such a situation, if oil prices fall or if the company faces any negative news, then TOT’s 50-DMA could quickly break below its 200-DMA. This trend could place Total stock in a bearish zone. For better future returns, TOT’s 50-DMA should stay above its 200-DMA.
Why the rise in Total stock?
Total stock’s correlation coefficient versus WTI for past one-year period stood at 0.49, implying a positive correlation. WTI prices grew 8.4% in 3Q17, which could have supported Total stock.
In 3Q17, Total reported better 1H17 numbers as it posted a 25% year-over-year rise in net adjusted operating earnings to ~$5.5 billion in 1H17. This improvement was due to an increase in earnings by its E&P (Exploration and Production), GRP (Gas, Renewables, and Power), and M&S (Marketing and Services) segments, which were partially offset by a fall in its R&C (Refining and Chemical) earnings.
In 3Q17, Total announced that it took over the operatorship of the huge Al-Shaheen oil field (along with Qatar Petroleum) for 25 years. The field produces 300,000 barrels per day of oil. Total also announced the acquisition of Maersk Oil & Gas A/S, a fully owned subsidiary of A.P. Møller–Maersk A/S, for ~$7.5 billion.
Subject to requisite approvals, this acquisition could be completed by 1Q18. This acquisition would expand Total’s Upstream portfolio globally and provide significant operational synergies.
In 3Q17, Total announced the launch of the Edradour and Glenlivet fields in the UK, which would add 56,000 boepd (barrels of oil equivalent per day) to Total’s overall upstream production.
In the next part, we’ll study the stock returns of Royal Dutch Shell (RDS.A) in 3Q17.