From Saturday's Milwaukee Journal:
They interviewed Patrick Retzer,portfolio manager for the Heartland U.S. Government Securities Fund and co-manager of the Heartland Value Plus Fund.
"Oil services stocks got knocked down hard earlier this year,but Retzer thinks the next significant move in oil prices will be upward,and recent mergers in the industry might be the beginnings of a consolidation wave.
El Nino has dramatically cut fuel use this winter,but if it has the predicted impact of heating things up this summer,Retzer thinks these companies could benefit.The possibilities of revived energy demand in Asia and an OPEC attempt to shore up energy prices also would help,he said.
These are great contrarian plays because everybody is so negative on oils and oil service stocks,Retzer said.One such small company stock Retzer holds is Precision Drilling Corp.(PDS),which peaked above $37 a share in October and bottomed at $16 a share in January.
Canada is finishing its pipeline into the U.S. We think they have to do a lot more drilling to keep that pipeline full,Retzer said.
Precision,a Canadian drilling company,is trading at about 10 times earnings,which makes it much cheaper than the stocks of its U.S. counterparts,Retzer said.
Retzer likes small companies in the oil and gas exploration industry,which should also benefit from the potential rise in oil prices.
They've got some very attractive prospects for new reserves and production,he said."
Good luck to all (long ESV,FGII,DO,GLM,TMAR,RIG) |
