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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (54423)10/18/2014 8:52:29 PM
From: E_K_S   of 78744
 
Apache Corp. (NYSE: APA)
Exxon Mobil Corporation (NYSE: XOM)

Exxon-Apache Pair Trade Poised for 11-Year High

Investors are favoring Exxon over Apache, following historic precedent -- see chart. When there’s a “steep decline” in oil prices, the ratio of this pair-trade -- with investors buying Exxon and shorting Apache -- increases, said Robbert van Batenburg, director of market strategy at broker-dealer Newedge USA LLC in New York.
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Been looking to add XOM at/or below $80.00/share. Booked my gain in SU selling my shares bought 12/2011 @ $26.63/share and sold @ $ 33.83/share. SU's cost of production is pretty high and Buffet has been selling his position early this year. I am looking to add to XOM as their cost of production is lower than SU and also have cash flow coming from up-stream operations.

I did complete a full position in SFY this week w/ an avg cost of $8.25/share and recent adds in MHR averaging $5.25/share. They can still drill for oil in the Baken profitably at $50.00/bbl. However, I favor NG producers (or those w/ more NG than Oil) so SFY & MHR are my value bets there. My fair value price target for SFY is $20.00/share. I believe MHR could reach $10.00/share once they get some of their land assets sold and start to pay down their debt.

I still think WTI Oil will trade below $80/bbl and the market may/could test recent lows. Therefore, keeping cash available to make some value Buys at lower prices in XOM and many Midstream MLP's (non drillers, gatherers and storage terminals).

I also have been accumulating the fertilizer producer UAN as a commodity play that pays a good distribution while waiting for the ammonia prices to increase. I expect to be selling shares above 420.00/share sometime next year.

EKS
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