Analysis: CVX APC BP DIS JPM

If you haven't seen the news, Chevron (CVX) announced on Friday that it will acquire all of Anadarko Petroleum Corp's (APC) shares outstanding for $65, valuing all of the outstanding shares at roughly $33 billion. This per share price represents an approximate 39% premium over Thursday's close and happens to be in line with our current price target.

Earlier this month in our Alert here, we wrote how Anadarko's stock price did not reflect how well the company is doing and how much cash they are generating in this oil environment. Combined with a shareholder friendly management team with a willingness to buyback stock, pay down debt, and increase the dividend to more competitive levels, we saw plenty of reasons to hold on to this stock and take the pain. It was simply too cheap and undervalued by the market. It was only a matter of time before the market (or Chevron) recognized this, and this is the perfect example of why giving up on value is a sin.

This transaction will be a combination of cash and stock, with APC shareholders receiving 0.3869 shares of Chevron and $16.25 per share, so we have a choice. Do we take the money and run, or do we stay on and become shareholders of CVX? Chevron happens to be one of our two favorite big cap oil stocks (the other being BP plc (BP) ), and the company is so confident about this transaction that management has already announced it will increase the share repurchase annual target by 25% to $5 billion. We are interested in exploring this further and have time to make a decision.

We will be out later today with additional thoughts on this deal, Disney's (DIS) Investor Day event, as well as JP Morgan's (JPM) top and bottom line beat this morning.

But as another reminder, our April members-only conference call will be todayApril 12 at 11:30 a.m. ET.

Earnings season is near, making now the right time to provide you with the rules you need to know to help navigate this period. Plus, we are looking forward to addressing your most pressing investing concerns on our upcoming members-only call.

Date: Friday, April 12, 2019

Time: 11:30 am ET

A live-stream webcast of the call will air on the: Action Alerts PLUS homepage here. Please return to this page slightly before the event to ensure your connection.

Note: If you don't have access to a desktop or mobile web browser you can still listen to the conference call by using the dial-in instructions below. (Please remember this is a private conference call is intended for Action Alerts PLUS subscribers only -- please do not share the dial-in information with outside parties)

Dial: +1 646 558 8656

Meeting ID: 992 648 862 followed by #

International: phone number

Toll Free: +1 877 853 5257

Meeting ID: 992 648 862 followed by #

NOTE: If you are unable to listen to the call during the live event, the replay will be available on this site later in the afternoon. In addition to a replay, an edited transcript will be made available in subsequent days.

Thanks, and we look forward to our discussion!

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long APC, BP, DIS, JPM.