Best energy ideas: Two votes for Nordic American Tanker (NAT)

Posted Oct 20th 2007 2:20PM by Steven Halpern
Filed under: Newsletters, Commodities, Oil, Stocks to Buy

"The commodity bull is awakening," says Curtis Hesler, editor of the Professional Timing Service. The advisor, who focuses on long-term market cycles, explains, "We have been through a long stretch where everything, including gold mining stocks and oil issues, have gone up and down in tandem with the movements in the popular averages (Nasdaq, Dow, S&P 500, etc.).

"We are going to enter a phase now and through 2008 where this will no longer be the case. Next year looks like it will be a very profitable year for commodity-related (real asset) issues, but dismal for financial (paper) assets.

"I am looking for $100.00 crude oil (as well as a move to $850 in gold). This should be the basis for your strategy. The commodity bull will thrive in 2008 at the expense of the general market, and the weak dollar will be no small reason for this.

"On the energy front, you should buy into weakness. If I were to pick one stock to buy today, it would be Nordic American Tanker Shipping (NYSE: NAT). If you already have some, hang on. If you don't, pick up a few shares.

"The dividend will vary from quarter to quarter. However, I expect you will get better than 10% on today's price. If things go as I think they will with crude oil, you may be very pleasantly surprised with both the dividends and the price of this stock a year from now."

Carla Pasternak in her High Yield Investing adds, "Tanker rates have been on the upswing recently, and the outlook appears fairly favorable. Looking ahead, tanker rates are largely dependent on the supply of ships available to carry crude oil and the demand for their services.

"An economic slowdown could weaken demand, while a deluge of ships expected to flood the market over the next few years could also push rates lower.

"Over the long-term, though, the need for oil carriers isn't going away, and the fact that NAT exclusively owns double-hulled tankers (which are more secure and will be required by international law by 2010) gives the firm a leg up on the competition. The stock is a buy for the patient, long-term investor with a stomach for volatility."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment commentary and favorite stocks of the nation's leading financial newsletter advisors.

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