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  • Do It Like Devon $APA $APC $EOG $NBL

    Devon Energy had been a heavy hitter in the oil industry since it entered the scene. So any company that can be called comparable you have to give it a chance. Here are a few companies that are performing well and seem to be following in the footsteps of Devon.

    Current shareholders should hold Devon Energy (NYSE:DVN) long-term, interested investors may consider 2012 as an opportune entry point to initiate a position on this stock. Devon Energy has comparable metrics to its peers, its dividend is adequate, it's effectively increasing its liquid production, it has a robust portfolio of assets in North America and Devon is in the midst of a transition to increase operational efficiencies and reduce costs. Like most E&Ps, Devon's stock, revenues and earnings are highly susceptible to fluctuations in the commodity markets. Devon is especially constrained and capable of an uptick because its assets are in North America and haven't benefited from increasing prices abroad.

    Comparable Metrics

    Based on their portfolios of assets, market cap and price per share, EOG Resources (NYSE:EOG), Apache (NYSE:APA), Anadarko Petroleum (NYSE:APC) and Noble Energy (NYSE:NBL) are the independent E&Ps most comparable to Devon Energy. Devon and Apache's price are both around 10.4 times earnings; Nobel Energy and EOG Resources are around 22 and 26 times earnings, respectively. Devon's price is around 2.2 times sales and 1.1 times its book value; only Apache has lower price ratios. Devon's current ratio is around 1.8 and its debt-to-equity ratio is around 0.48. Devon Energy's annualized dividend is around $0.80 per share.

    Devon's $5.96 EPS has declined 3.6% in 2012 and is projected to increase 49% in 2013 - this is the highest projection of EPS growth among these E&Ps. Apache's $8.35 EPS is the highest among the E&Ps while EOG's 549% EPS growth in 2012, is the highest among the aforementioned. Devon's sales have increased 3.2% in the past 5 years - this is the lowest sales growth among these E&Ps. Devon's ROE is around 11.1%, its operating margin is around 33%, and its profit margin is around 22%. Devon has the highest profit margin among these E&Ps. Apache's 11.9% ROE and 37.3% operating margin are the highest among these E&Ps.

    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: APA, APC, EOG, Oil and Gas
    Dec 08 10:51 PM | Link | Comment!
  • Bad Press Equals Good Profits $BP $CHK $HES

    Large well known companies no matter what the media says about them are in that position for a reason. Negative press can be useful for profiting if done right when you look at one of these companies share price dip on bad press alone and not because something in the company has changed. That is why they are the ones to watch when they end up on the national news.

    If you are looking to get into the oil & gas sector, now is a great time to do so. Speculation over a macroeconomic double dip has largely died down while the prospects of entering a full recovery have yet to be appreciated. With greater industrial activity comes rising energy demand. I recommend betting on the overly beaten down stocks that are just as likely as the majors to profit off of this rising demand. I also recommend looking at stocks that will be selling off assets to secure stronger balance sheets.

    It's no secret that the media likes to pick on Chesapeake and BP. With all of the talk about hidden hedge funds, devastating oil spills, and conflict of interests, you may have forgotten that both of these companies actually have really, really good fundamentals.

    For one, Chesapeake sits on leading natural gas plays. Unlike the largest natural gas producer (Exxon), Chesapeake is more leveraged towards the energy resource as a percent of business. The market has been overly negative about the prospects of cold weather, while failing to consider that rig effectiveness has gone up. Chesapeake is boosting its infrastructure to capitalize on improving margins and pricing.

    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: BP, CHK, HES, Oil and Gas
    Dec 08 10:46 PM | Link | Comment!
  • Energy Transfer Partners Is Fundamentally Strong $ETP

    With the fluctuation in the markets and the price of oil it is more important than ever to focus on the fundamentals, but what to look for? Well we a company and some of the reasons it could be a good investment. When making decisions here are a few things we consider important before your final decision.

    We are going to look at Energy transfer partners (NYSE:ETP) today. We will examine it from a fundamental and technical perspective. In general, investors should select a company based on its quarterly earnings growth rates, profitability margins, payout ratio, quarterly revenue growth rates, current ratio, etc. in contrast to focusing only on the yield. Before taking a look at Energy transfer partners, we put it through the following selection process and it meets and exceeded all the listed requirements.

    The selection process

    1. A profit margin of 20% or higher
    2. Sales should be trending upwards for the past five years
    3. 3-5 year Projected growth rate of 10% or higher
    4. A five year expected PEG ratio that is below the industry average of 2.76. Energy transfer has five year expected PEG of 1.43
    5. Interest coverage ratio of 3.00 or higher
    6. A trailing P/E that is significantly below the industry average of 22.44. Energy transfer partners has a trailing P/E of 9.07

    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: ETP, Oil and Gas
    Nov 24 2:10 PM | Link | Comment!
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