Jake Taylor

Three Oil Stocks to Weather Any Storm

Petrobras does contract its rigs to drill, but it is still a driller in the sense that it is taking oil out of the ground. Isn't a widget manufacturer that outsources its operations in China still a widget manufacturer? The SEC filings that I read also point to $40 oil as a pricing point and since Saudi Arabia uses these same estimates for its public infrastructure programs, I think it's a reasonable price for oil long-term, making its projects feasible. Finally, the discovery off the coast of Rio de Janeiro is already producing and since it is a quasi-governmental company, it has pretty much secured the rights to these areas (unless the government sets up another company at the risk of angering the investment community).

TNK and NAT are both very good companies and I'd also be a buyer of either of those as a substitute for FRO. You're right that it is having problems with the builds right now, but they have laid out a realistic plan to solve it. However, NAT has a great balance sheet and TNK is actually a stock that I own (and therefore was hesitant to write about).

U.S. Steel: Growing by LEAPS and Bounds

@ Jase: I do like Largo Resources and some of the other South American plays. MT and GSI are also two others that I follow.

@ kkin365: LEAPS are never as liquid as options, but they do trade roughly at value (after all, they can technically be exercised anytime if the discount is too great). The idea behind buying the LEAPS through is that (1) it leverages your returns long-term (2) you can afford to diversify. GSI = General Steel Holdings.