New York-based integrated energy company Hess (HES) is working hard to get less integrated right now. The firm shut down the majority of its refining capacity in the last year, finally cutting the cord on the most consistently unprofitable part of its downstream operations. That leaves Hess with total proven reserves of 1.5 billion barrels of oil equivalent in North America, Australia, North Africa and the Middle East, and more than 1,360 gas stations spread across the Eastern U.S.
Management showed guts by slashing at its refinery capacity. Disintegrating operations at an oil producer is a scary prospect for most, but with refinery operations becoming increasingly commoditized, it makes sense to unload the earnings drag. The fact that Hess was willing to do it means that management is willing to do more than just kick the can. I like that a lot.Like other smaller oil producers, Hess carries some balance sheet leverage with around $7.5 billion in debt. But with more than $850 million in cash and investments and a $4 billion credit facility, Hess isn't likely to have any liquidity problems in 2012. The firm's price to book ratio of 0.89 means that Hess is trading at a bargain during a time when crude spot prices sit just below $90. That makes Hess a bargain right now.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV