Hi Dave -
Still like ELP. PKD is someone else- maybe on BBR thread ?
CanRoys = Happy Camper !
What I like now -
Still like CanRoys - AVN, ERF, some NCN and SJT -
But they have gotten pricey unless natural gas goes to the moon.(more on that later) I would say Hold or Accumulate (put in low bids to buy a little at a time)
If it looks like the price of NG will be going even higher, I will try to buy more Royalty Trusts.
Natural gas heavy E&Ps - Even if the price of Natgas drops to $5.50, these should do very well -
I like -
CRK - highly leveraged - lots of debt, few hedges
CHK - HEAVY insider buying
CRED - NG + a neat recovery technology - note - very thin stock, moves in jumps
TMR - unloved because a previous BIG WELL turned out to be a bust. Now have found REAL BIG WELLS. Appear production up sharply, income up about 50% this quarter, more to come.
I have bought all of the above in the past two weeks.
On buy list (limit orders in) -
THX - a biggie, 900 million market cap, underpriced. I expect when marekt cap gets t o 1 Billion, motre insititutions will be able t obuy, and price will move even more.
CWEI - $17, earned over $1.20 last quarter.
CRZO - 8 rigs running now, low finding cost.
ROYL - mostly California producer of natural gas - very thin stock, people on SI have accidently moved the price 10% by buying and selling.
Also looking at, but not ready to buy yet -
GASE.ob - a really tiny exploration play
DVN - A big stock, I like Devon for long term play, but will go with the faster moving smaller stocks for now.
UTEs & IPPS
ELP good. Expect this to be $5.00 by fall
SRP been very nice, have bought more recently. Just over $5.00 , may move up in next month.
WMB - they also have NG production - will be buying more
RRI - still about 1/3 of book value, but seem to be resting. I may buy more later
MIR - taking their time to do the re-fi. Now aboutr $3.40, should be > $5.00 after re-fi
EP El Paso - BIg mess here, being cleaned up , new board memebers, selling assets, etc. Largest pipeline assests in US. Now Heading for a big proxy fight. A buy under $10. Lots of enetertainment value here, which I ususallly avoid.
Also has NG production.
Close to being sold by me -
CNP - Centerpoint - hold. Seems to have flatten for a while.
ILA - Aquila - May have sold off too many assests. Stock not going anywhere. Some people think their management went to school on the small bus.
Sold AES and CPN -
CPN - Calpine Big Natural gas consumer. Avoid for now.
AES - losing Brazil plant, cut deal with Enron. Management may have been ethically challenged.
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Other areas -
Starting to look at business intelligence software -
Business Objects BOBJ, Brio BRIO, Hyperion
Looks like there's a lot of this being bought to extract value from all the data companies have.
Sales are trending up strongly for this group.
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Next area may be smaller Canadian E&Ps -
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Also bought some China Fund, CHN, as a way to play the growth in China.
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Holding SCLN SciClone, my one Biotech. Should have bought the whole sector with a biotech fund, may still do so. NEW attitude at FDA.
Previously FDA would only approve drugs that were safe and effective - even if thay were for cancer which is 80% terminal in 6 months , they werer very worried about side effects and safety. No, I am not kidding about this.
Now, a more rational attitude in place.
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Thinking about that US Chemical industry for shorts - looking for companies with heavy domestic biz, strong overseas competition, heavy natural gas use (key ), and lots of debt.
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Natural gas handicapping -
Right now, I think there is a bout a 5% or less cahnce the price of NG goes under $5.50 for the rest of the year - need 3 of these four items -
a very cool summer,
low industrial demand,
lots of cheap oil, and
most nuke plants up
Most likely 80% , price stays between $5.50 and $7.50.
10% cahnce -Price could go to $7.50 - $.8.50 range with a warm summer.
The to the moon sceanario.
5% Chance - Hot Summer, many nukes down, at least 2 Hurricanes shut down Gulf production, Early Cold cold snap by October - Average price over $8.50, Price in November >>$10.00, less than 2200 Bcf in storage.
This also means price will stay high for almost another 9 months to rebuild storage. |
