With oil high, oil companies have all been lifted by a rising tide. If you've valued oil companies, which one is the best value and why? What metric or blend of metrics are you using to make that determination?
I like to look at total resources (Proved, Probably, and Possible) relative to market capitalization. I think this is the most important metric.
Reasoning:
* Total resources are the best estimate of long term NPV and NPV is the most rational price target and P/NPV is the best indicator of value. P/NAV essentially encompasses P/B and P/E together in a comprehensive metric.
* Resources are the backbone of the company. Consider the extremes: If the company had zero resources it would be able to produce nothing and be useless. If the company had infinite resources it would be so amazing, it would never have to spend on exploration or acquisition, and it could burn through them as fast it wanted, or even just sell the rights off. Therefore resources are important.
For this reason, I wouldn't mirror BRK's ownership of OXY or CVX. BRK's purchase of OXY this time last year was a signal that oil was good value, but it doesn't mean that OXY is the best value just because it was approved by the Oracle of Omaha, merely the best fit for BRK's mega cap portfolio. Therefore a retail investor chasing oil value would have to study all the oil stocks and calculate the best one for themselves.