Analysis of Total share price for trading

 

General presentation of the Total Company:

The Total Company that we know today has not always existed in its current state. In fact, it is through the merger and acquisitions of the first company and others such as Petrofina and Elf Aquitaine that Total came into being. In the beginning the Total Company was called ‘Compagnie Française des pétroles’ (French Oil company).

Since 2007 Total has been the largest French company as well as that with the highest share capital throughout the Euro zone.  It should also be noted that Total is also the fifth largest oil group behind Exxon Mobil, Chevron Texaco, Shell and BP. 

The annual turnover of this company is around 10 billion Euros and its activities can be divided into several main sectors: 

• The major activity sector of Total is of course the refining and distribution of crude oil which includes the trading and sea transport of petrol. The group actually includes 25 specialised refineries throughout the world and 16,000 petrol stations internationally. This sector represents the largest part of the company’s turnover.
• The production and distribution of fuel are also two major activities of the Total Company. These are natural gas and coal with which we include transport, storage and sales activities. This part currently represents 15% of the company’s turnover.
• Finally the last activity sector of the Total Company is the production of polyethylene and fertilizers.

The oil production managed by Total is distributed throughout several continents principally Africa but also Europe, the Middle East and Asia.

 

The major competitors of Total:

The Total Group is currently one of the five top global oil producers. It therefore has four direct competitors, all large companies in this sector. To assist you in trading effectively in the Total share price here are the details of its four major competitors:

• Royal Dutch Shell: This group, based in the Netherlands, achieves over 272 billion dollars in annual turnover and produces more than 3 million barrels of oil per day.
• ExxonMobil: Based in the United States, ExxonMobil currently produces over 4.1 million barrels per day and achieves an annual turnover of 268 billion dollars.
• BP: This company, originating from Great Britain, achieves an annual turnover of 226 billion dollars and produces 3.3 million barrels per day.
• Chevron: Situated in the United States, this company achieves a turnover of 138 billion dollars per year and produces over 2.6 billion barrels per day.

The Total group is placed in fourth position worldwide in its sector between BP and Chevron with an annual turnover of 165 billion dollars and 2.3 billion barrels per day.

 

The major partners of Total:

The Total group has also implemented strategic partnerships with certain companies such as:

• PSA: Total became associated with PSA over 50 years ago and, in 2017, renewed this collaboration. Total is notably the sole supplier of engine lubricants to PSA factories.
• Samsung: Total also created a partnership with the Samsung group related to the Asian market. Their collaborative company has exercised activities in the petrochemicals sector in South Korea for over ten years now.

 

Total Company listing

Total shares are listed on the French stock market Euronext Paris as well as the CAC40, Total has a 12.51% part of this index. 

Ever since the introduction onto the market, Total shares have undergone strong movement fluctuations, mainly increasing in the beginning followed then by a strong downwards movement during 2005. In 2007 they started climbing again with the general worldwide oil price boom.

Since 2010 the price has continued to rise so reaching its original level.

 

Some advice for trading in Total shares:

Whether you decide to invest in Total shares in order to add them to your investment portfolio or you wish to simply speculate on the movement of its share price, these assets could be highly profitable if you take into account the pertinent indicators.

Of course, it is above all important to monitor the price of crude oil to forecast the level of future demand, but be careful, a strong rise in the price of oil can lead to a drop in demand and therefore cause a decrease in the company profits.

The news and events of the energy sector are also primordial in the implementation of your stock market investment strategy relating to Total shares. Therefore, worldwide economic and political decisions that have a direct connection with the oil market will have an influence on the demand for Total shares and those too of other companies in the petroleum sector.

Finally, if you use CFDs to speculate on the price of Total shares, do not forget to take into account all the new investments of this company and its diverse sectors of activity.

 

Analysis of the historical movements of the Total share price:

It can be beneficial to analyse the historical stock market charts of the Total share price over the last ten years. By doing so a strong volatility can be observed with a succession of highly visible peaks and dips that can be directly linked to economical events that have marked the history of this group and that we will examine in detail later on. 

With a quotation price of above 61 Euros in July 2007, Total experienced one of its highest historical levels and the highest price over a decade. However the share price then followed a staggered falling correction until reaching close to €32 in October 2008.

During several years the asset price tried to cross the threshold of €40. It achieved this level twice, between September 2009 and April 2010 and then between January and May 2011. But it wasn’t until May 2013 that it experienced a prolonged rising trend. In fact, since this date, a highly volatile rising trend enabled the share price to reach €51.38 in June 2014.

Of course, just after this rise, the price of this asset underwent a downwards retraction, still marked by numerous micro-movements, towards €40.51 which it reached in December 2015. It then followed a new rising trend that was still noticeable at the beginning of 2017.

 

What are the signals to follow when trading Total shares? 

Of course, Total share prices are straightforwardly linked to the oil price as it is the latter that influences demand. The stronger the demand, the higher the price of the company shares and so the higher value of this company will increase the profitability as well. 

As well as monitoring closely the oil price you should also watch all economic and political news and events that may have an effect on this commodity and also take into account the prices at the petrol pumps which differ from that of the barrel price to a greater or lesser extent. 

To summarise, Total shares are relatively easy to follow and their movements can generally be easily anticipated by investors. To learn more about this sector you can also consult our article on investing in oil.

 

Economic and financial history of the Total Company:

Following its introduction onto the stock markets in 1929, the history of the Total Company has been marked by numerous events that have influenced the price of its shares to a varying degree as well as its general success. Here we have summarised what could be considered the major events in its history:

• In 1961 Total discovered the offshore fields in Gabon.
• Total merged with the Desmarais Frères Company in 1965.
• The first deep water exploration was undertaken in the Mediterranean in 1982.
• In 1986 the first automatic service stations opened in France.
• In 1993 part of the shares held by the state was sold to individuals.
• Total became Total Fina in 1999 following a merger with the Belgian company Petrofina.
• In the year 2000 Total purchased Elf Aquitaine. The group thereby became known as Total Fina-Elf and doubled its turnover.
• In 2003 the company again assumed the ‘Total’ name.
• In 2005 Total invested in the Akpo field.
• In 2006 Total undertook a split with Arkema, a specialist in vinyl products and industrial chemicals. In this way, every Total share owned gave the acquired right to an Arkema share.
• In 2007 the SAFE Chine sovereign fund invested 2.8 billion dollars and thereby became a 1.6% shareholder in the capital of the Total Company.
• In 2008, Qatar invested two billion Euros in the company’s capital and became one of its major shareholders.
• In 2010, Total sold its subsidiary Jarden, specialised in sponges, kitchen gloves and childcare items, to Mapa-Spontex for 335 million Euros.
• In 2011, Total massively invested in solar energy with the purchase of a 60% share in the American Sunpower Company.
• In 2014 Total became the fifth largest oil producer in the world after Exxon, Chevron, Royal Dutch Shell, and PetroChina.
• In 2015 Total transferred 25% of its share in the development of the Mourmansk oil field to Gazprom.
• In 2016, Total signed an agreement with the Iranian Minister of Oil to develop and produce the South Azadegan oil field.
• Still in 2016, Total purchased the Saft Group, a battery manufacturer, for 900 million Euros to develop its renewable energy section. It also purchased Lampiris, a Belgian natural gas and green energy provider.

Finally, at the end of 2016, Total announced an alliance with the Brazilian Petrobas Group for 2.2 billion dollars.

 

CFDs for trading in Total shares online:

The CFDs offered by the Forex brokers enable easier investment in the oil sector by buying and selling positions on Total shares online directly, in real time, on the stock markets. By taking these positions, either rising or falling, it is possible to take advantage of the extreme volatility of the Total share price.

Also, CFDs offer a leverage effect that enables an increase in profits without the need for a major capital investment. Another advantage of CFDs is that the trading platforms that offer them also offer a range of tools and functions to their users that promote an improved analysis of the markets and assist in targeting opportunities that could be seized.

To conclude, CFDs are specially created contracts that are appropriate for trading in the Total share price or the price of any other shares in this sector.

 

What are the advantages of Total shares as an asset?

In order to buy Total shares online, it’s essential that you be convinced that this company is of real value. As you will quickly come to realise, as an asset, Total presents numerous advantages. Here are the company’s main advantages.

First of all, the company’s position on the world oil market is of course of one its strengths. It should be noted that Total is part of the five biggest oil companies in the world. It’s also well positioned in the natural gas market and has been able to develop its solar energy production activity enough to become number two worldwide thanks to Sun Power subsidiary.

Investors who follow Total stock also benefit from interesting visibility in terms of the company’s oil activities, seeing as it regularly discloses its production targets by number of barrels per annum. This way, you can see for yourself that production has strongly increased in 2017 in comparison with previous years along with an accelerated growth rate in 2016. Total doesn’t seem concerned by a possible decrease in production in 2018 or the years to come.

Regarding the oil sector, the Total company has revealed one of the highest replacement rates on the market with respect to its reserves. As a matter of fact, this rate was of 107% in 2017 which means that the company’s production continues to grow and that demand remains strong.

Another one of the company’s major advantages involves the distribution of its production activities. The company benefits from a good balance of production with 33% of its oil being produced in Angola and Nigeria and some other 14% in Norway. This way, it protects itself against eventual economic constraints generated by geopolitical developments.

Recently, Total has established an industrial reorganisation of its activities which should pay off in the years to come. Thus, it has developed two new lines of business, namely its Gas Renewable & Power subsidiary which specialises in natural gas, renewable energy and energy efficiency as well as Total Global Services which regroups several support activities. Additionally, it was decided that as part of this reorganisation the holding company should now refocus on its key strategic functions.

It should be noted that Total, unlike other big oil companies, behaves particularly well when facing price cuts of crude oil. In such cases, the company practices decreasing important operational costs which allows it to protect its profits and thus keep its investors satisfied.

Finally, Total stock is also considered by investors who acquire it as a relatively reassuring asset thanks to continuously important cash flows as well as a management strategy which aims to preserve a dividend amounting to half of the profits along with a deposit service.

As you can see, Total’s advantages are plentiful for stock market investors.

 

What are the disadvantages and weaknesses of Total shares as an asset?

Of course, as you might expect, Total shares don’t only come with advantages to investors who wish to speculate on its development. As such, before you beginning analysing it, you should be familiar with its disadvantages. This is why we’d like to offer a detailed account of the company’s weaknesses and the factors which make this asset prone to deliver bearish signals.

One of Total’s main weaknesses concerns, of course, its production and the elements to which it is exposed. Perhaps most notably, the increasingly important decline of oil fields which have reached maturity as well as the company’s struggle to set up new oil deposits. Of course, the quota variations enforced by OPEC are also an important constraint to the company.

As mentioned above, Total has often succeeded in maintaining its investors’ trust even when the price of barrels of crude oil decline. However, the company has recently made important investments in the field of exploration, even though prices were on the rise. The profitability of these investments is thus menaced by the recent decline in the price of barrels.

Another one of the company’s negative points concerns the structural crisis faced by the European refining industry which has recently had a tendency to remain stuck.

Finally, even though Total produces its oil in different geographical zones and countries, it remains exposed to certain geopolitical risks, in particular regarding its African production which represents over 30% of the company’s total production, most notably in Nigeria, Lybia, Yemen or the Middle East. Russian production also remains to be closely monitored for the same reasons.

 

Some advice in order to help you carry out a good fundamental analysis of Total shares:

Every good investor who wishes to establish an efficient strategy involving Total shares must of course be able to detect purchase and sale signals out of stock charts thanks to a correct technical analysis, but also thanks to a thorough fundamental analysis. In order to do so, it’s essential that you account for certain elements and choice indicators that you’ll find in more detail below:

• First of all, it is of course essential that you closely monitor the share price movements of crude oil barrels, even though its impact cannot be moderated by the company’s strategy.
• The Total company established in 2016 a cost-reduction plan with precise objectives for 2017 and 2018. It would be sensible to closely monitor the extent to which these objectives are fulfilled as well as the ones from the announced disposal program.
• Even though Total’s refining and chemical activities have recently showed very low margins, the company is still trying to rectify this sector. It would be wise to follow up on the implications of this effort.
• Total has also proceeded with major changes to its renewable energy sector, in particular through the takeover of the Saft company. It goes without saying that the profitability of this operation will have real influence on its stock price.
• The relationship between Total and Iran which currently represents the world’s second biggest natural gas reserve will be a critical factor in the development of the company’s activities in this increasingly popular sector. Recently, the relationship seems to have improved.
• Of course, you should also monitor any of the company’s further developments in activities related to renewable energy, in particular regarding solar energy. This line of business is very promising and should be beneficial to the company in the medium-to-long term if the company decides to keep investing and maintains its current positioning.

As we’ve just seen, it is relatively easy to carry out a complete and coherent fundamental analysis of the Total stock. Thanks to the different indicators that we’ve just enumerated as well as most any business website or your broker’s newsfeed, you’ll be able to determine what the growth prospects of this company are. Thus, thanks to an overlap of these signals with different technical signals, you will be able to optimally anticipate the fluctuations of the Total stock and then take a strategic position