Andrew Gordon is bearish on the long-term growth of cash-rich oil giant Exxon Mobile (NYSE:XOM). Exxon, along with other oil majors, has recently been spending more of its cash on share buybacks than on oil exploration and production. Andrew says this is because all the easy oil has already been discovered.

This from today’s Investor’s Daily Edge…

These companies didn’t have anything really promising to spend their tens of billions of dollars on. All the easy oil has already been discovered and drilled. With easy oil disappearing, so has the easy money.

Intel doesn’t have that problem. Nor do Google, Verizo, and a slew of other firms, including BHP Billiton, the big global mining company. BHP digs for profits just as oil companies do. But it’s spending loads of money on dozens of mines worldwide.

Mobil Exxon’s record profits look real impressive. Its revenues are more than the GDP of half the countries in the world. But they’re not reinvesting their profits back into the company at a rate that will keep them growing… and keep the oil flowing.

Investing in the big corporate spenders at a time of looming recession sounds a bit risky, no? Well, you have to spend money to make money. You know that. The companies that are spending wisely on exciting projects now are planting the seeds of future growth. When the economic winter recedes (and recessions don’t last forever), their profits will blossom.

Behind these so-called prudent corporate spenders are companies that have lost their way. They’ll tell you they’re just being careful. Maybe they are. If you don’t have anything good to spend your money on, not spending it on anything is the careful choice. But is that the kind of company you want to invest in? Give me one bursting with new projects… technology initiatives… products in the pipeline. That’s a company that has future growth written all over it.

P.S. Andrew can point you to two best-in-class rig companies that will be on the receiving end of a $10-trillion tidal wave of cash. Learn more here.

Source: For Companies, Spending Isn’t an Extravagence… It’s a Must