Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Four Energy Stocks Worth a Look in 2012


Last year was a tough one for energy stocks, but 2012 promises a bit more upside for select companies.


For much of 2011, there was little opportunity in the stocks of major integrated producers.

They tend to lead stable, solid market lives. Often they are the hiding place of big-money investment organizations when market uncertainty appears and more volatile issues are in retreat. They tend to go down less, partly due to this attention.

What tends to run them up is substantial price appreciation in crude oil, or for individual companies, a major resource field find. For much of the year, crude prices were retreating from well over $100.

The principal resource finds have centered around US developments of natural gas by horizontal fracking. The success there has created a price-depressing oversupply bubble, raising questions as to the ultimate value of natural gas, and questions as to how quickly distribution facilities and alternative markets can be created.

The only current excitement seems to be in the Chinese National Offshore Oil Company, now known as CNOOC Limited (CEO), and Anadarko Petroleum (APC). Both have long (five to 10 years) forecast histories providing favorable reward-to-risk opportunities at present balances in their upside-to-downside outlooks.

CEO has averaged gains from forecast date on the following three months of 22%, compared to drawdowns of -10%. Andarko's similar gains have been 14% in contrast to drawdowns of only -6%, ranking it better than 94% of our population of more than 2,000 stocks and ETFs.

The advances in natural gas drilling and recovery have been more meaningful to the independent exploration and production (E&P) companies than for the integrated producers.

EV Energy Partners (EVEP)
Only five years old, this a prime example of recent development success. Forecasts at least as encouraging as the present have occurred in nearly 170 days. Market prices in the following three months have been higher than at the forecast day three-quarters of the time.

Gains average 13%, compared to drawdowns of -5%. Further, proposed buys at time of these forecasts produced profits in almost 80% of the cases. Gains in all 166 averaged an annual rate of 97%. On our reward-risk scale, EVEP outranks 95% of all others.

Energy XXI (Bermuda) Ltd. (EXXI)
This is only a year older than EVEP, and produces principally oil from properties developed onshore in Louisiana and Texas, and in the Gulf of Mexico.

It also has an enviable record of providing stock gains following 192 days' forecasts at least as attractive as today's. Profits could be had in 83% of those, and all 192 averaged 11% in holding periods of a month and a half, for an annual rate of 134%.

No promises of the future here, but these examples show what can, and does, happen. Other E&P stocks with combined odds & payoffs above our 5% hurdle rate are buyable, but these two are the best performers to date.

Editor's Note: This article was written by Peter Way of Block Traders' Oil and Gold Monitor.

Below, find some more great investing and trading content from MoneyShow:

This Nuclear Story Is Ready to Mushroom
By Marc Gerstein

3 Bank Stocks With Big Upside
By Igor Greenwald

4 Winners From 2011...and More for 2012
By Chloe Lutts

It's Time to Watch the Central Banks
By Axel Merk

Twitter: @TopProsTopPicks
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos