Tuesday, December 10, 2013
2:39 PMSimmons picks nat gas winners: Cabot, Range, Southwestern
- As the weather forecast calls for another blast of harsh wintry weather along the east coast after a storm last weekend, Simmons analysts pick three natural gas stocks to play the strength in the gas markets: Cabot Oil and Gas (COG -1.1%), Range Resources (RRC -0.8%) and Southwestern Energy (SWN -1.1%).
- The firm says the three stocks are cheaper on cash flow multiples than valuation sheets may show because natural gas futures prices used to make those calculations are ~11% below current spot prices.
- Also, the stocks have been middling performers of late, which may tell investors that "the move in the forward strip may not be fully reflected in the equities."
12:23 PMSterne Agee likes Consol Energy as a top pick for 2014
- Consol Energy (CNX +1.8%) is Sterne Agee's top stock pick in coal, metals and mining; the firm admires CNX's low costs and growing gas production, and sees shares rising to $60 from the current $37-$38 in the coming year.
- The firm believes investors will increasingly support CNX's steps toward becoming an energy growth vehicle; generating value for some of its capitalized, non-core thermal coal assets while de-risking its balance sheet and providing accretive growth capital for its shale holdings should allow valuation to improve as coal and natural gas markets normalize.
- Other top energy and industrial favorites: GM, DHI, HAL, EXP, EGN, RAIL, PCP, CRS.
11:58 AMTenaris to benefit from Mexico energy reform, Citi says Buy
- Tubular goods and steel pipe provider Tenaris (TS -1.3%) has a long-standing relationship with Mexico's state-run oil company Pemex and will be a major beneficiary of Mexico’s transformational energy reform, Citi says in reiterating its Buy rating on the company with $54 price target.
- Most of Mexico's resource potential is located in areas that demand high premium OCTG content, the firm says, and TS supplies almost 100% of the OCTG demand in Mexico through its just-in-time contract with Pemex.
10:57 AMPDCE Energy upgraded to Buy at Stifel, shares +2.3%
- PDC Energy (PDCE +2.3%) is upgraded to Buy from Hold with a $75 price target at Stifel, which looks for PDCE to increasingly direct its ramping drilling program toward its core acreage.
- After drilling most of its Niobrara wells in the Wattenberg Outer Core over the past three years in order to save acreage and minimize gas pipeline constraints, the firm looks for PDCE to shift its drilling emphasis to the Middle Core of the play where well economics are superior.