Tilson Makes the Case for Investing in BP

Whitney Tilson is convinced that BP is simply too cheap to ignore at the current valuation.  Given the steady stream of negative headlines due to the massive Deepwater Horizon oil spill, BP shares are quickly approaching a 45 percent discount to the stock price that prevailed during much of April.  Mr. Tilson makes it clear that BP shares could certainly fall even further in the short run, but he believes that the dividend should be safe.

While Mr. Tilson’s comments regarding BP’s dividend make logical sense, the political pressure on management may soon require a cut regardless of the company’s ability to make payments. Furthermore, the “asbestos-like” qualities of BP’s liability exposure that Mr. Tilson mentions will make total economic exposure unknown for years or decades to come.  BP’s management has also proven remarkably incompetent and politically tone deaf throughout the crisis.  It may make more sense to look elsewhere in the beleaguered oil and gas industry where stock prices have also been hammered rather than to accept the uncertainty at BP.

To learn more about Whitney Tilson’s bullish case for BP, view the video below.

For RSS Feed Subscribers, please click on this link for the video.

Disclosure:  No Position.

Related posts:

1. Tilson is Bullish on Large Cap Stocks Including J&J, Microsoft and Berkshire In a wide ranging discussion this morning on CNBC, Whitney...
2. Whitney Tilson on Berkshire Hathaway’s Intrinsic Value Morningstar recently interviewed T2 Partners Founder Whitney Tilson regarding his...
3. Value Investing Congress: $1,800 Discount for Rational Walk Readers We are pleased to announce a great opportunity for readers...
4. Bill Ackman to Speak at NYC Value Investing Congress Bill Ackman recently agreed to speak at the 6th annual...
5. The Inoculated Investor’s Value Investing Congress Meeting Notes The Value Investing Congress took place in Pasadena, California last...

Short URL: http://www.rationalwalk.com/?p=7409

 Print This Post

Contact the Author

© Copyright and Disclaimer