The business of Chevron Corporation is divided into two areas: downstream and upstream. The first includes processing, and the second provides exploration and production. The latter area is highly dependent on price fluctuations in the oil market. She is experiencing not the best of times due to the decline in the cost of “black gold.”
Only during 2015, the upstream direction of Chevron Corporation lost about USD 1.9 billion. However, the downstream division of the company successfully covered these losses. Chevron Corporation is a powerful corporation that has survived more than one global crisis, continues to grow.
US government supports the company. Electricity generation is included in activities of “national interest.” Thus, Chevron Corporation has a powerful competitive advantage. The company is supported by the most dominant structure in the world – the US state.
Also, the corporation ranks first in terms of energy costs. The cost of its products is the lowest in the industry. Amazon is one of the largest in the world. She continually invests in promising fields for the extraction of energy resources. At the same time, the corporation is actively working with other companies in the industry.
Thus, investments are divided into several participants, followed by a proportional distribution of profits. Through this approach, Chevron Corporation can effectively manage risk while maintaining growth prospects around the world.
The company has all the necessary resources for the implementation of the largest and most profitable projects in the production and processing of gas and oil. Also, this applies to both the upstream segment and the downstream. The sharp collapse in oil prices last occurred in 2009. Corporate earnings per share were distributed over the years as follows:
In assessing the prospects for Chevron Corporation shares, it should be borne in mind that this company is one of the few “aristocrats” in the industry (along with Exxon Mobile). It strongly depends on the cyclical features of the oil and gas industry. However, during periods of recession, the corporation behaves wisely, taking all necessary measures to stabilize its position. This mechanism has been honed for decades. Therefore, the stability of Chevron Corporation is an indisputable fact for most experts and analysts.
In the stock trading of this company, it is necessary to use standard methods of technical and fundamental analysis. A key aspect is the price of oil. If it increases, so does Chevron Corporation’s capitalization. Moreover, in the event of a fall, the drawdown in the share price is not as widespread as that of other operators in the oil and gas sector.
Nevertheless, when trading in equity securities of this concern, you need competent money management. Never risk the amount that you are not ready to lose. The risk in one transaction should not exceed 5-10% of your deposit. During periods of the revitalization of stock market volatility, severe losses can be incurred if your forecast for changes in the stock price turns out to be wrong.