Jim Cramer Discusses Exxon (XOM) & Venezuela Operation

We recently published 11 Stocks on Jim Cramer’s Radar.  Exxon Mobil Corporation (NYSE:XOM) is one of the stocks on Jim Cramer radar.

Like Chevron, Exxon Mobil Corporation (NYSE:XOM)’s shares also rose after the US operation in Venezuela. As it did with Chevron, Freedom Capital also downgraded the firm’s shares in January. Cutting the rating to Sell from Hold and setting a $123 share price target, the firm pointed out that oil stocks were performing well while oil prices were struggling. The recent US action in Venezuela has seen oil prices drop after President Trump revealed that Venezuela will send supplies to the US. Exxon Mobil Corporation (NYSE:XOM)’s shares have also slipped recently after initially surging following the political shift in Venezuela. On Wednesday, the firm also provided color to the debate surrounding oil prices. In a regulatory filing, Exxon Mobil Corporation (NYSE:XOM) pointed out that lower crude oil prices could reduce its upstream fourth quarter earnings by $800 million to $1.2 billion. Cramer cautioned that buying oil stocks on the back of the recent developments could be risky:

“Well look I think people want to immediately jump to the conclusion that perhaps that you can un-nationalize what’s been nationalized. You can just dust off the infrastructure. I remember, I remember when I used to work with Larry Culpa. And there was a sense, that when you opened a rack, which was doing two million, that it would go to five. Well, eight years later it went to four. So, those who are trading on this right now, they are people who have been wrong about a lot of things and they are going to be wrong about this. Now maybe not wrong today, but I do think that, people might buy nuclear on this too. I think we have to, the year of magical investing ended and now we’re in the year of stupid investing and I think we have to call out trades that are stupid. If you’re going to buy oil on this, I wanna know why, because the price of oil is going to go lower, not higher.”

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Disclosure: None. This article is originally published at Insider Monkey.