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Canadian Natural Resources (CNQ) has the assets an energy-hungry world needs. And its stock is worth a review.
Canadian Natural features balanced, low-risk assets, complemented by an oil sands production base.
CNQ's biggest project is its Horizon oil sands operation in the Athabasca oil sands region of Canada. The company estimates that there are 6 billion to 8 billion recoverable barrels available on this property.
Overall, CNQ energy production is 62% crude, 38% natural gas, with 94% of its production in G8 countries.
The First Call FY2010/FY2011 EPS estimates for CNQ are $3.01 to $3.92. Each EPS looks about 5% low, according to my analysis.
Technically, Canadian Natural's uptrend was interrupted by the May 6 "flash crash," but the pull-back has created a decent entry point near $65.
2010 Outlook: I view Canadian Natural as a long-term play, but if investors are looking to sell CNQ within the year, it's probably best to take your profits after it rises to $73 or $74, if it fails to clear $75.
Stock Analysis: I consider Canadian Natural Resources to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in CNQ now, then buy another 25% in one month if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 50% of my CNQ position before July 2010 and I'd put a sell/stop loss at $47.
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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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