first, whats the outlook for oil stocks such as Exxon Mobil [XOM] and Texaco [TX]?
S&P is bullish on the energy sector, principally because of higher oil prices and the opportunities that allow for margin improvement among the major oil integrateds and, of course, the drillers and exploration and production companies. We rank Exxon Mobil a hold (3-STAR). Exxon posted very strong earnings today, above expectations. However, the company’s reliance on refining and marketing could prove to be a weak spot if margins in that business continue their recent decline. S&P recommends accumulation (4-STAR) of Texaco, as this company is more positively sensitive to higher oil and gas prices. Q: What are some of S&P’s current 5-STAR stocks? A: Some stocks S&P currently ranks 5-STAR (strong buy) include Millipore [MIL], a maker of industrial filters primarily for semiconductor makers, pharmaceutical companies, and academic and commercial laboratories. Forest Laboratories [FRX] is another 5-STAR. FRX develops and makes branded and generic ethical drug products. Scientific-Atlanta [S
