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Nicholas Anderson's  Instablog

Nicholas Anderson
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Nick is a former marine, current finance student and independent trader, who is 100% self taught. Nick has particular interest in the offshore drilling industry and prefers to trade in the offshore drilling industry. Nick blends conventional methods of analysis with unconventional methods of his... More
  • Ya... Oil...It's 2013 And Its Still How We Make Money In The Market 0 comments
    Jun 6, 2013 5:33 PM | about stocks: AAPL, SDRL, RDS.A, RDS.B

    Its 2013 so much has changed through out the years but a few things haven't. The market will be closed on Holidays... tax returns are filed or extended by April 15th... and... "Big Oil" is gonna make money hand over fist. I seems like so many of young investors I converse with are putting money into anything but oil. When asked: "apple(aapl) towards the bottom of its 52 week spread or Royal Dutch Shell (RDS-A/ RDS-B) roughly 10-15% off of its 52 week bottom)" Most if not all will reply: "Apple" But, why deviate from something that's been producing high returns, consistently, for 80 or 90 years.

    The value play I like in the Energy Sector is Royal Dutch Shell (RDS-A/RDS-B) . It's got a P/E ratio below 8 (7.92)... a dividend close to 5%... and with a share buyback program active its an easy buy

    My growth play in the Energy Sector is Seadrill LTD. (NYSE:SDRL) Seadrill has been paying a dividend of 8.9%. 21 new drilling units will be delivered this year... only 2 of them don't have contracts. Their fleet of drill rigs and drill ships is state of the art when compared to the aging fleets of Haliburton or Transocean and with oil companies looking for new oil fields at depths exceeding 5,000ft Seadrill is in position for some explosive revenue growth.

    Although i will concede the future of our energy is clearly not in consumable resources, it will be for the next decade or so. So until alternative energy finishes shaping up... Im going to stick with "evil oil", put some cash in my pocket and keep those alternative energy small caps on my watch list.

    Disclosure: I am long SDRL, RDS.A.

    Themes: Energy/ Oil Stocks: AAPL, SDRL, RDS.A, RDS.B
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