Martina GutikColleen HurleyBen JekeliBen Smalley.ppt

Absolute ? High Low Median Current Target Multiple Target E, S, B /share Target Price Forward P/E 30.5 5.6 14.4 8.3 11 8.72 95.92 P/S 1.3 0.4 0.9 0.8 0.9 106.86 96.17 P/B 4.6 1.4 2.5 1.6 2 48.03 96.06 P/CF 11.6 3.8 7.2 6.1 7.2 12.60 90.71 P/EBITDA 8.42 2.37 5.06 4.44 5.06 17.31 87.58 ? ? ? ? ? ? Average Target 93.29 Current Price 72.57 ? ? ? ? Upside 28.6% Relative to Industry ? Hgih Low Median Current Forward P/E 1.6 0.59 0.9 0.82 P/S 1.1 0.8 1 1 P/B 1.3 0.8 0.9 0.9 P/CF 1.3 0.5 1 0.8 P/EBITDA 1.81 0.71 0.87 0.84 Recommendation Summary No action on NOV and NE SELL 368 basis points of Transocean Expected losses impacting offshore drilling BUY 418 basis points of Chevron Corp. Diversified business Questions? Petroleum operations include exploration, development, production, and marketing of crude oil and nat gas. Involved in refining, marketing, and transportation operations in crude oil and converting natural gas into finished petro products. Company also engages in the production and marketing of coal and molybdenum. * For economic mention that a 10% drop is a correction not bear market so we are not too concerned about the possibility of another recession * With dividend of 4% * As stated before dividends have increased 22 years in a row and we can expect that trend to continue. When the market is volatile dividends can be a consistent return * Martina Gutik Colleen Hurley Ben Jekeli Ben Smalley Recommendation We recommend: Selling 368 basis points or 100% of Transocean Buying 418 basis points of Chevron Corp. (CVX) Holding our position in Noble Corp. Holding our position in National Oilwell Agenda Sector Presentation Recap Transocean Analysis Chevron Analysis Recommendation Summary % SIM Over/Under SP 500 As of 4/30/10 Voted to increase weight by 50 bp Current Stocks Stock Weight Price Target Price Upside BTU 0% $37.29 $43 15.3% NOV 3.30% $39.16 $45 10.6% NE 2.78% $31.04 $37 19% RIG 3.68% $55.38 $64 15.6% Transocean (RIG) Overview Sector: Energy Industry: Oil