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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (30732)4/22/2008 3:46:37 PM
From: Jurgis Bekepuris  Read Replies (1) of 78657
 
As much as I am energy bull, I think that most companies in the sector are becoming fairly valued in this runup. This does not mean much, since bulls tend to overshoot as bears do. I think companies are being valued for ~$80-90 oil now though and no significant recession related consumption drop. I think that gas plays may be even more overvalued, although it may be hard to say with the huge runup of agro commodities that may require more gas.

I would be cautious adding here. Most Bakken and Marcellus plays you mentioned look very fairly valued or even overvalued in some cases. Some Canadian oilsands may still be cheap, some are quite expensive and most are very tough to value. PBR is not cheap, but may be still attractive based on all the oil they are finding.

The really cheap plays are mostly the companies with big refinery component. I am not convinced refiners will do well and market agrees so far. However, we may be wrong and then MRO, COP would be great plays here. PTR ran up with Chinese plan of "subsidizing" refiners suffering from price controls. Although I have position in PTR, I really don't like that it depends so much on the government whim, so I won't add and may even sell.

I bought today a small position in GPOR mentioned on oil sands thread. I may buy a bit of BSIC if it decides to swing down again.
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