Anadarko Petroleum: For those who think oil won't fall to $30 anytime soon

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There are analysts and oil gurus who argue that $30 per barrel oil is possible if the U.S./global economic recoveries stall.

$30 oil? Don't count on it, which is why I'm Reiterating my Buy rating for Anadarko Petroleum Corp. (NYSE: APC), first recommended on May 14, 2009 at a price of $43.55.


Look for APC to post a 2-3% production increase in FY2009, followed by a 4-5% rise in FT2010: institutional investors are looking past this year's likely loss, and toward better quarters in FY2010 - which is a major reason Anadarko'stock is up about 35% since May. The First Call FY2009/FY2010 EPS estimates for APC are a loss of $1.60 to a profit of 85 cents.

Stock Analysis: Anadarko Petroleum is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in APC now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your APC position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $26.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

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Last updated: February 10, 2010: 05:29 AM

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