The fighting in the suburbs of Tripoli between two rebel militias and central security forces of Libya, which started Aug. 24, is pushing oil prices up.
The Crude Oil WTI Futures expiring in October are at $69.3 per barrel, up 0.7% since Aug. 24, while the Brent Oil Futures expiring in November rose 2.5% to $77.6 per barrel.
One of the supermajor refiners that is strongly engaged in mineral activities in the Libyan country is Eni S.p.A. (E, Financial).
On Monday, the Italian multinational oil and gas refiner confirmed - through a company spokesman - that activities in the North African country are currently proceeding regularly.
What is happening in Libya may have a significant impact on the security. It may create an appealing entry point into this multinational company for the production and sale of petroleum and natural gas.
The stock of the Italian global supermajor is trading at $37.3 per share on the New York Stock Exchange. For the 52 weeks through Aug. 31, the share price has climbed 16% and is now trading below the 100- and 50-day simple moving average lines.
A 3% decrease will push the share price below the 200-simple moving average line and the price-book ratio below 1. That is the threshold value investors usually consider as a screening criterion. Eni has a market capitalization of $69.1 billion.
Such a drop will also send the share price below the midpoint of the 52-week range of $31.58 to $40.15.
The stock is already appealing with an earnings yield of 8%, which is near the industry median, and a forward dividend yield of 5.04%. If the conflict in Tripoli weighs on the market value of Eni, potential investors could see a 9% earnings yield opportunity. That would be more than double what the high-quality market corporate bonds are currently yielding - another criterion value investors usually consider.
The forward dividend yield is slightly below the industry median of 5.34%, but much higher than what the S&P 500 index is yielding. The U.S. stock market benchmark is granting 1.76%.
Having distributed dividends to shareholders for more than 20 years, the oil and gas producer is a regular and loyal dividend payer. The company is currently paying a six-month dividend of 93.6 cents per common share.
Eni has operations in 79 countries and is one of the largest industrial companies in the world.Â
The company has 1,817.09 American Depositary Receipts, of which 1.79% is held by institutions according to GuruFocus.
As of March 9, the Italian government owns a 30.1% golden share in the company.
During the second quarter, Charles Brandes reduced his holding by 13.32% to 2,058,961 shares.
Steven Cohen bought 64,400 shares and Jim Simons bought 76,370 sharess.
Among the top shareholders, Charles Brandes (Trades, Portfolio) owns 0.11% of total shares outstanding, Mondrian Investment Partners holds 0.09% and Northern Trust Corp. holds 0.09%.
GuruFocus has assigned a financial strength rating of 5 out of 10 and a profitability and growth rating of 6 out of 10.
As of June 30, the company had approximately $137.8 billion in total assets. The total equity was worth approximately $58.8 billion.
Eni closed fiscal 2017 $80.16 billion in revenue, $6.2 billion in operating income and about $4.04 billion in net income.
Disclosure: I have no positions in any securities mentioned in this article.
