October 6, 2022

Aker BP: Oil rebels at good value

Aker BP: Oil rebels at good value

Who likes oil stocks in these times? The oil barons are waging wars of aggression like in the last century and summers are not at all like we are used to. But oil is important, not only for burning, but also for many modern materials that help us live in a more environmentally friendly way. Plastic may bother many, but if wood, glass and metal are used again for the many plastic applications, it does not exactly conserve natural resources either.

That is why the oil top 10 stocks of 6 October 2022 are anything but boring. Aker BP from Norway caught our eye, because we Europeans will want to import less oil from dictatorships, if only for security reasons. The stock is also on the OBX (Norway) Top 10 list.

PRO: The following three points speak for a buy:

  1. Good value with a rank of 77 (better than 77% of peers) and of course excellent growth, better than all peers (Growth Rank = 100).
  2. An interesting culture, as they call themselves the rebels of the oil industry. Obermatt CEO Dr Hermann J. Stern, who himself invested in the Swiss venture Rebells00, spontaneously likes the idea (full disclosure: this is not paid advertising).
  3. Despite difficult business, Aker BP has a big focus on reducing emissions, which are expected to fall by 50% by 2030. Despite USD 15 billion of new investments, the dividend was slightly increased.

CONTRA: The following three points argue against it:

  1. Oil platforms and gas pipelines are notorious for disasters at sea and are always big burdens on the environment. However, the company has good sustainability goals with processes that make production more environmentally friendly. They are currently developing a new system to detect oil spills
  2. The high level of debt can be seen in the Leverage Rank, which is rather poor with a rank of 19. However, liquidity is high with a rank of 79 and debt refinancing is assured a rank of 75.
  3. Oil is not a good option for risk-averse investors, but prices are currently rising and will probably continue to do so.

The PRO points clearly outweigh the cons and that is why we are buying Aker BP for the Obermatt Wikifolio.

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