These two energy stocks are perfect examples of the kind of California Gold Rush “pick and shovel” plays that are alive and well in energy investing. Read more...
- Two Energy Stocks to Buy Now Before Prices Rebound
- Watch What Carl Icahn Does to These Energy Stocks
- Why Oil Refiners Are Among the Best Energy Stocks to Buy Now
- Five Energy Stocks to Buy That Offer Juicy Dividends with Low Risk
- The Best Energy Stocks to Buy According to Industry Insiders
- This Key Energy Metric Could Make You A Lot of Money
- Shale Oil Stocks are Poised to Earn Investors Big Profits
- Investing in Alternative Energy Stocks: Five Solar Power Winners
- Ride the Boom With These 5 Bakken Oil Shale Stocks
- Five Energy Stocks Insiders Are Buying Up
- Energy Investors Pocket Profit on Oil Price Rally – And It's Just the Beginning
- Looming Loss of Federal Incentives Darkens Future of Solar Power Stocks
Don't look now, but there are some problems developing in the global energy network.
It's hardly reassuring that the epicenter of all this is the Middle East.
The primary problem is hardly new. Actually, calling it an "old" problem is more accurate because the culprit is a collapsing network of delivery and storage that has been deteriorating for decades.
Unfortunately, this is hitting areas already beset by broad, accelerating economic shortfalls the hardest. That they also happen to be areas of significant unrest hardly improves the situation.
The latest crisis is in Pakistan. Here's why the picture there is so grim...
Marina and I will soon board a plane for another trip to Europe.
We are off to Frankfurt, where I have meetings on European natural gas import costs; meanwhile, my better half gets to spoil our grandchildren, who live just outside the city.
My responsibility is to address the energy balance problems emerging for the continent. The focus may be on Germany and the rest of Western Europe, but these problems are emerging elsewhere around the world.
With Berlin opting to phase out nuclear power, the continent's largest economy now has a daunting task to assemble an energy mix that meets expected demand.
This started as a political tradeoff, but it is likely to become the major concern in the broader national strategy to stave off recession. A similar tradeoff is developing in the United States.
A much-ballyhooed German venture into solar and wind has hit a brick wall. There is now a played-down move to import additional nuclear-generated power from neighbors, but now the country is doing the unthinkable to meet its energy demands.
This environmentally conscious country, with one of the strongest green political movements in Europe, is now importing more coal than at any point in the past decade.
The options are limited, along with the time to decide on how to implement all of it. That is likely to result in a political tradeoff distasteful to just about every political party and interest group in Germany.
However, the problems do not end there.
The U.S. role in the energy industry was a focal point last week at a major conference of senior global energy decision-makers in Houston - and what came out of it was good news for those investing in energy stocks.
The 32nd annual IHS CERAWeek featured some 300 speakers, including senior industry executives and government officials, who provided fresh insight into energy's future.
Energy analyst, Pulitzer Prize-winning author and vice chairman at energy research firm IHS CERA Daniel Yergin, who presided over the conference, told Politico, "We've got to be aware of rosy scenarios, and I think experienced people ... are cautious about rosy scenarios. But I would say ... it's a mood of tempered optimism and confidence that technology will help solve our problem - continue to help us meet these big energy needs and these big environmental needs that we have."
IHS CERAWeek included discussions of new technologies, shifts in worldwide demand, regulatory concerns, and supply and demand.
Optimistic conference participants agreed the energy industry is being transformed and said the industry offers plenty of good opportunities for investing in energy stocks.
Latest EIA numbers show that demand is as low as it's been in a decade or more. Although energy stocks are out of favor right now, over the next several years, these two could easily become growth darlings once again as energy demand inevitably rises. Details here.
Energy stocks have been largely left behind in the recent stock market rally - except for those with interest from activist investors like Carl Icahn.
You see, concerns about global demand as well as political pressure to focus on alternative energy have weighed on energy stocks. So have the low price and oversupply conditions in the natural gas markets.
Many of these energy stocks trade at what seem to be very low prices compared with the assets owned by the corporations and their future prospects.
This has attracted the attention of many activist investors looking to force the share price to unlock the real value of the underlying corporation.
One of the best-known activist investors, Carl Icahn, has accumulated several positions in leading energy companies in the past year because of low prices and under-valuations.
Take, for example, what Icahn's done with CVR Energy Inc. (NYSE: CVI).
Icahn owns 83% of CVR, a refiner that has seen its stock price soar recently as refining margins have improved. The company also has a fertilizer business that is a major beneficiary of lower natural gas prices.
The stock has better than doubled in the past year so it would be foolish for investors to chase the shares now.
But CVR does serve as an example of the sizable returns Icahn is looking to achieve in his foray into additional energy investments, like the following two stocks he's been accumulating.
Shale oil production continues its upward path, increasing overall U.S. oil production and making specific groups of energy stocks among the best to buy right now.
In fact, the U.S. Energy Information Agency (EIA) reported last month that domestic oil production surpassed the 7 million barrel a day level, the highest point in nearly 20 years. Production this year, the EIA says, will rise by another 14%.
This is obviously good news for the companies producing that oil, and it gets even better. Many industries outside the energy sector, including chemicals and railroads, have benefited from the shale boom.
But there is one subsector in the energy industry that has reaped the rewards of plentiful oil from the Bakken and other areas more than any other, and that's the refining industry.
The only thing better than a sector with a lot of growth potential - like energy stocks - is finding a financially sound group of stocks to buy within that sector that pays a healthy dividend to boot.
And a recent screen by investment research firm Value Line turned up five such energy stocks, all electric and gas utilities.
Technically, Value Line cast a wider net that included all stocks. The screen actually yielded 17 stocks, many of them well-known companies like McDonald's Corp., Lockheed Martin and General Mills.
But the beauty of an exercise like this is finding the less-obvious gems, which in this case turned out to be mostly energy stocks.
Value Line used several proprietary filters - financial strength, safety and timeliness -
to narrow the list.
It is no secret to investors that energy stocks lagged the market in 2012 - but now in 2013 some are becoming the best stocks to buy as they head for huge gains.
The Energy Select Sector SPDR ETF (NYSE: XLE) has gained about 6.5% over the past year, below the 8% gain in the Dow Jones Industrial Average and the 11.5% rise in the Standard & Poor's 500 Index.
But just looking at 2013, you'll see XLE has risen 8.7%, compared to the Dow's 6% gains and the S&P's 5.13%.
And money is pouring into this sector from a key group of investors: corporate insiders.
As far back as 1968 legendary speculator Victor Niederhoffer and his mentor Professor James Lorie discovered that cluster buying of stock by corporate insiders offered substantial excess returns over the market. When three or more officers and directors of a company break out their checkbooks to buy their own stock there is a good chance that the stock price is headed higher.
This anomaly had been confirmed many times by academics and investors over the year and still holds true today.
The other metric with tracking when it comes to corporate insiders is buying by those two executive officers who are in the best position to evaluate the company's conditions and prospects - the chief executive officer and chief financial officer. If they are buying more shares in the open market chances are high they think the shares are cheap and good things are about to happen.
Best Stocks to Buy Now: What Energy Insiders Like
We are starting to see a substantial amount of insider activity in a few oil production and energy services names, like the following:
This week I'd like to talk about how this key metric affects the balance of your energy investment portfolio.
Now, this is certainly not the only element in determining preferable stock moves, but it's critical that you know the EROEI because it could make you a lot of money.
Recognizing the real elements that determine the genuine cost of energy production, EROEI is becoming an important factor in estimating profit margins.
And those margins certainly influence the performance of a stock as we've seen all across the energy value chain in recent months.
EROEI refers to the amount of energy used to produce energy.
If this ratio produces a figure of 1.0, EROEI is telling us that it takes one barrel of oil equivalent to produce one barrel as a result.
Anything under 1.0 means that more energy is consumed in the production process than is gained as an end product.
EROEI has the advantage of being a useful yardstick throughout the energy curve - from upstream production sites (wellheads, generating facilities) through midstream (gathering, transit, storage and initial processing) to downstream (refineries, terminals, wholesale and retail distribution, end use).
Some applications of EROEI are already in wide usage, although we don't tend to think about them in these terms. Energy-efficiency ratings on appliances, heating and cooling systems, windows, or building supplies are an application at the end of the energy curve.
But how can we use this to fine-tune an investment portfolio?
To continue reading, please click here...
It's all thanks to huge deposits of shale oil.
At least four new major shale oil plays including the Bakken in Montana and North Dakota, the Eagle Ford in Texas, and the Marcellus in Pennsylvania and New York, may have more than 20 billion barrels each of recoverable oil.
Each of these new shale oil plays has the potential to double the total reserves we have today.
In fact, the "shale oil revolution" will soon make the United States the world's leading producer of crude oil, a report from Goldman Sachs Group Inc. (NYSE: GS) recently predicted.
The United States will produce more than 10.7 million barrels of oil per day by 2017, the report said. That's more than any other country, including Saudi Arabia.
And even though oil prices are in a short-term swoon, the glut of shale oil is about to make savvy investors a huge fortune.
That's why you need to take a hard look at a particular group of shale oil stocks that stand to benefit most from this boom.
But first, you need to know how this came about.
Solyndra famously imploded, the price of polysilicon dropped 60%, and a glut of natural gas has made it the "new" alternative energy source.
But make no mistake about it: alternative energy stocks are going to be long-term winners-especially for solar power investors.
For instance did you know that Germans are initiating a campaign valued at more than $260 billion to harness wind and solar power. It is already being called the biggest restructuring of the national energy landscape since the end of World War II.
Or that China plans to double its solar power capacity by installing three GW this year, according to China Daily.
And despite the recent declines, analysts expect European demand to rise again in 2012. UBS forecasts that solar power generation will rise from 21 GW in 2011 to 25 GW in 2012.
What's more, solar panel prices are expected to stabilize as a result of tighter inventories and improving demand.
That's increasing talk within the industry that pure-play alternative energy stocks could be gobbled up by oil companies or large-scale manufacturers.
With that in mind here are five solar power possibilities, including innovative companies, takeover targets, and companies that can compete on cost.
With activity ramping up rapidly - production has soared from 100,000 barrels a day in 2005 to 494,000 barrels a day in February - the Bakken oil shale boom could turn out to be just as big, if not bigger than the California gold rush 1849.
Last week we told you about how the Bakken oil shale boom has affected Williston, ND. The town has an absurdly low unemployment rate of 0.8%, and the average pay for the oil company jobs is about $90,000.
One way to take advantage of this boom yourself would be to move to North Dakota.
But with dozens of companies flocking to the region, a much easier way to get in on the boom is to simply invest in some Bakken oil shale stocks.
The allure of big profits has attracted dozens of companies to the Bakken oil shale formation. The list ranges from industry giants like Exxon Mobil Corporation (NYSE: XOM) and ConocoPhillips (NYSE: COP) to pipeline companies like Enbridge Inc. (NYSE: ENB).
With oil prices expected to keep rising, and the production in the Bakken not expected to peak until 2020, it will be hard not to make money in Bakken oil shale stocks.
"Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska," Harold Hamm, CEO of Continental Resources Inc. (NYSE: CLR) - one of the major players in the Bakken oil shale boom -- told The Wall Street Journal last October. "We expect our reserves and production to triple over the next five years."
Still, some Bakken oil shale stocks will benefit more than others.
For example, the really big companies like Exxon, with large global operations, will see less of a boost than companies with operations concentrated in the Bakken and other North American shale deposits.
Money Morning has taken a look at these Bakken oil shale stocks and found five companies positioned to benefit most from this historic find's tremendous potential.
Although not a guarantee that a stock will rise - nothing is - insider trading activity reflects confidence in a company's potential by the people who should know best. In particular, insider buying can be an early indicator of change in fortune for a stock that has been beaten down.
And because inside stock buyers are in it for the long term - they're not permitted to make short-term profits - they only buy when they feel reasonably certain of their company's longer-term prospects.
So while such companies may not offer a quick profit, they're usually worth a hard look for investors with a longer time horizon.
Lately - within the past month - insiders at five energy companies have been buying up shares of their own stock.
U.S. oil futures rose 40 cents to $85.81 a barrel on the New York Mercantile Exchange (NYMEX). Black gold has climbed 12% since hitting a 52-week low of $76 a barrel last week - a 37% fall from its April high near $120 a barrel.
Brent crude oil futures rose 1.6% to $110.73 a barrel for a five-day gain of 11% -- the biggest since August 2009.
This week's gains follow on the heels of a recent slump - but subscribers to our Private Briefing service knew this would be the case.
We forecast the oil markets short-term pullback in our early Private Briefing columns and told investors to take advantage of the crude oil sell-off while energy stock prices were low.
Sure enough, these recommended stocks are climbing as oil prices are once again on the rise:
- The oil-related stock we highlighted it Aug. 12 in "How to Profit From $120-a-Barrel Oil ..." is up 2.7% from that day's closing price.
- The high-return energy play our Global Macro Trends Specialist Jack Barnes detailed on Aug. 19 in "The Energy Stock to Buy Now...", is up 14% this week.
- And the favorite low-risk natural gas stock that resources specialist Peter Krauth shared Sept. 15 in "A "Dream Pick' in the U.S. Energy Sector", has gained 4.2% during the oil futures five-day price rally.