On Jan 10, 2014, we have reiterated our Neutral recommendation
). The company currently has a Zacks Rank #4 (Sell).
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Why the Reiteration?
TOTAL continued with its aggressive drilling and exploration
strategy. TOTAL leveraged its strong financial position to make
acquisitions and divested its less productive assets during the
quarter to become more competitive.
The decision of TOTAL to venture into the renewable energy space
is appreciable. The company along with its subsidiary
) is involved in quite a number of large solar projects - worth
mentioning among them is the Antelope Valley Solar Project (AVSP)
in California. TOTAL's investment in the solar sector could pay
rich dividends going forward.
TOTAL also has numerous exploration and production projects in
various stages of development. These projects are scheduled to
come online in the next few years, which will further strengthen
the position of this oil and gas major. Timely completion of
these projects holds the key; however, any delay in the gestation
period of the projects could negatively impact the company's
TOTAL operates in more than 130 countries, which provide a stable
production stream, but also make it vulnerable to exchange rate
fluctuation, political turmoil and change in policies from the
In addition, despite the precautionary measures taken by the
company, the possibility of accidents cannot be fully ruled out.
Any recurrence of the accidents like in the UK North Sea or
Nigeria could impede the production targets of the company.
Other Stocks to Consider
Better-ranked companies in the oil & sector include
Imperial Oil Ltd.
), both with a Zacks #2 Rank (Buy).