| As Chevron (CVX) will report earnings this | | | | with a miss in terms of expectations for this |
| week, you may be wondering if it will be | | | | company and immediate falling numbers. Thus |
| beneficial to purchase shares of this company | | | | if such a trend continues, it should be no |
| in attempt of earning higher capital gains. | | | | surprise this Friday when Chevron posts the |
| You may also be wondering why I am endorsing | | | | bottom line number way above most everyone's |
| the purchase of this equity at a time when | | | | expectations.As you read that last paragraph, |
| oil prices are at its lowest point for this | | | | you may say to yourself about the effects |
| year. While such is a valid claim, there is a | | | | currently happening now will bring to the |
| more profound reason to the success that | | | | next quarter results for Chevron. While such |
| Chevron will post this week which will | | | | is a valid concern, think about the upcoming |
| surprise many investors throughout Wall | | | | months. Many predictions have indicated that |
| Street.Since the stock market naturally is a | | | | a milder than normal winter would be |
| rational expectations market, the information | | | | approaching. However, with snow reaching |
| consumed by investors stays recent and | | | | places about a month or two earlier than |
| continuously changes on a day to day basis. | | | | normal coupled with the fact the OPEC will |
| Many of these investors are always trying to | | | | continue to cut inventory, do not expect a |
| look in foresight to how equities could | | | | significant further decrease in the price of |
| potentially react to certain changes in the | | | | oil anytime soon. As prices have reach their |
| economy. While such is typically an | | | | more than likely lowest point, the only way |
| insightful proposal, in the case of Chevron, | | | | they can move now is up, and more than likely |
| many of these investors should have a clear | | | | they will be up in a matter of weeks which |
| sense of hindsight before making hasty | | | | should have a positive effect on oil |
| predictions. When looking at Chevron, its | | | | companies such as Chevron. As I say this, you |
| previous operational results were reported a | | | | may be thinking that I am contradicting |
| few months ago in late July. However, the | | | | myself as I am looking into foresight instead |
| actual 2nd quarter finished June 30th which | | | | of examining what has been put in front of |
| surprisingly should have more implications | | | | me. However, the reasoning here is that |
| than usually thought of.Through that one | | | | prices have reached their lowest point of the |
| month period between the quarter's end and | | | | year and won't decrease any further. However, |
| the results posted by Chevron, the oil market | | | | unlike the previous quarter's situation where |
| went through unprecedented territory reaching | | | | prices went from incredibly high to |
| record highs of almost 80 dollars per barrel. | | | | incredibly low, I believe this quarter there |
| While of course in the recent months oil has | | | | will be a much smaller margin of difference |
| fallen dramatically by 25%, such an | | | | between high and low prices this upcoming |
| incredible value should remain in investors | | | | quarter which should position analyst |
| mind when thinking of purchasing the stock. | | | | earnings to be a better representation of how |
| The reason I say this can relate back to my | | | | Chevron will perform. If such analysis is |
| premise of how the rational expectations | | | | still to risky to believe, just think of the |
| market of the stock market may fool some | | | | fact that it is inevitable, with shrinking |
| individuals who impatiently focus completely | | | | supplies, that oil prices will increase in |
| on future news. Such sentiments sometimes | | | | the future complimented with the fact that |
| have negative implications as for the 3rd | | | | Chevron is a respectable name which has grown |
| quarter many Wall Street analysts have | | | | at a steady but encouraging rate since its |
| predicted an EPS estimate of 2.02 for this | | | | IPO days.Thus, with the obvious spectacular |
| oil giant. While such a number may sound | | | | fundamentals coupled with such EPS analysis, |
| normal or foreign relative to what it should | | | | look for shares of Chevron to produce some |
| be, I believe such a number is greatly | | | | positive and surprising feedback from Wall |
| undervalued because of the foresight of | | | | Street this week. As in most cases, |
| impatient analysts. Using supportive material | | | | predicting the future and examining the |
| of only recent weeks in terms of how the oil | | | | present is what will bring success. In the |
| market has performed, more than likely | | | | case of Chevron, having a clear |
| analysts worried over such a drop and failed | | | | representation of hindsight should reap more |
| to notice the record highs just three months | | | | benefits than both the present and future |
| ago and undervalue this estimate. The same | | | | combined.Dennis Biray presents advice on all |
| can be said three months prior when analysts | | | | kinds of topics ranging from finance and |
| overvalued the EPS estimate of Chevron | | | | investing to fitness to sports. |
| because of the recent events which coupled | | | | |