Consider the facts: ExxonMobil (XOM) has 22.8 billion barrels of oil equivalent (a common industry measure) in reserves, of which slightly more than half is crude oil and oil sands. It has an additional 51.2 billion barrels of oil equivalent in additional resource potential that it cannot yet count as reserves, and it has the largest oil refining system in the world, capable of pumping out 6.4 million barrels of gasoline and fuel oil and the like per day. It is also one of the world's largest chemical makers.

Due to more than a half a billion dollars worth of investment in technology and systems design over the past several years, Exxon has been able to turn all that production into more profits than any company has been able to achieve in the history of the planet. It was rewarded with a 39% total return last year, and is up another 11% this year. But in my view, there is still much more to come, as the company still earns only a price/earnings multiple of 12X, vs. the S&P 500 multiple of 15X.

In other words, the most profitable company on the planet, which has $5.33 per share in cash and is growing in excess of 10% a year, is getting a commoner's valuation. If investors were merely to decide to give XOM the average valuation of the market, and it earns just the consensus of $6.75 per share next year (which I think is way too low), it would be trading at $101, or 20% higher than the current price.