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