Thursday, October 30, 2008

The Dilemma with Berry Petroleum

Many people find it practical and normal to invest in stocks in oil companies such as Berry Petroleum. This is only right specially now that oil prices are hiking up again and it is very apparent that these prices will never go down anymore. Stock market software programs will also indicate so. However, one must also be careful in choosing since oil is not as stable as it may seem. It may be for now but with the advent of several biodiesel fuel products, petroleum oil might just go down.

The common recommendation when investing in Berry Petroleum is that it should be done in small caps. This is because this small cap will represent the rising value of oil production in domestic cases. Perhaps this also has something to do with the recent internal issues that Berry Petroleum is facing. Its former CEO has left the company with a very strong financial backbone worthy of stock growth. However, there is no one to replace him yet and the lack of a leader that will take charge of the company makes it difficult to have the company be at a stable state. In fact, some members of the board have proposed selling the company. Of course, we all know that this is not good. Also, family owners are facing a dilemma here. Out of the nine seats in the board, three are descendants of the founder of the Berry Petroleum company and it is just right that they find a chief Executive Officer who will understand that values of this family.

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