Shares of oil-industry bigwig Chevron (NYSE: CVX) rose 9.2% in September to $117.50 per share, just a nickel away from its all-time split-adjusted high. While that sounds impressive, it was middle-of-the-road performance for the month, which saw rising crude oil prices and broad gains across the oil sector.
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However, it lagged the overall oil and gas market, as measured by the SPDR S&P Oil & Gas Exploration & Production ETF.
A better-than-9% gain in a single month for a company as big as Chevron is nothing to sneeze at. Certainly, not many companies with a market cap above $200 billion see those kinds of monthly gains. But in this case, the gains were shared by Chevron's big oil-industry peers. In fact, BP and Royal Dutch Shell gained more than 10% for the month, while ExxonMobil lagged only a bit behind.
The companies' gains closely mirrored the price of WTI crude, which rose for the month as well:
While Chevron's recent stock-price recovery may have fueled speculation about an impending stock split, September's performance doesn't really affect the fundamental thesis for investing in the company. When oil prices rise, oil-company stocks tend to rise along with them. If oil prices drop next month, we'll likely see a similar reaction from the shares of Chevron and its peers.
Right now, all of the integrated oil majors are trying to "do more with less": maintain profitability and cash flow neutrality -- or, better yet, become cash flow positive -- at these new, lower oil prices. Chevron's management has been trying to grow production while keeping capital spending low. We'll see from its next earnings report whether it's truly making progress.
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