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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerEach year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.
Lukoil Company (Other OTC: LUKOY) is the top speculative idea for 2007 from Eric Roseman, editor of Commodity Trend Alert.
The hedge fund and resource expert notes, "This stock marks the first time in 16 years that I'm making a recommendation in Russia. I usually don't feel good about investing in a country where shareholders are subjected to the spontaneous whims of a despot, but in this case, the story is just too compelling to ignore.
"Lukoil is world's second-largest oil company, and trades at a massive discount to ExxonMobil Corporation, despite producing almost the same annual oil production every year. For a value investor like me, quite frankly, it's all I need to know to make an investment in a secular bull market for energy.
"The big risk for long-term investors in Lukoil is not the price of oil or natural gas; I have no doubt in my mind that in five years, possibly less, this will be a $150 stock, if not more. The big risk is Putin and his intentions with Lukoil. Will the Russian president nationalize Lukoil? The risk with Russia is that Putin might sabotage shareholders.
"The good news -- and its very bullish -- is that Lukoil has adopted Western accounting standards because they'll eventually list on the NYSE, raise capital, and become a world-class oil company. It won't achieve that goal if Putin ransacks the company.
"Another bonus for shareholders: Houston-based ConocoPhillips also owns an 18% stake in the company. In the end, the 'Putin risk' is a distinct possibility but, in my view, unlikely. The way I see it, this could be one of the best investments of your lifetime."
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Reader Comments (Page 1 of 1)
12-27-2006 @ 10:56AM
John Sullivan said...
Good (but less) profit could be achieved through the purchase of ConocoPhillips, which Mr. Buffett and other sages have bought in the last year. It's a good buy now. Dividends and cap gains are great!