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Peabody (BTU): Energy expert looks to coal

"Peabody Energy (BTU) remains a buy in our 'gushers portfolio'." says energy sector expert Elliott Gue.

In his The Energy Strategist, he explains, "Strong demand for coal from India and China is a growth story that will play out in 2010."

Gue explains, "Peabody reported its third quarter results and share prices have reacted positively. The weakness in US coal markets remains a challenge, but Peabody has taken steps to shore up profitability in the US, cutting back planned production and locking in contracts for 2010 at fixed prices.

Continue reading Peabody (BTU): Energy expert looks to coal

Suncor (SU): A merger 'made in Canada'

"Canadian energy giants Suncor Energy (NYSE: SU) and PetroCanada (NYSE: PCZ) announced their intention to merge; Suncor, a holding in our 'Wildcatters Portfolio' will be the surviving entity," says Elliott Gue.

In his The Energy Strategist, he explains, "The combined firm will be the fifth-largest energy company in North America and the largest in Canada." Here, he explains why the new stock remains a buy.

"The combined firm will have more financial flexibility than Suncor did on its own. Debt ratios will be healthier, and the combined firm will also be able to redirect certain planned capital expenditures to higher return potential projects.

Continue reading Suncor (SU): A merger 'made in Canada'

IBM: For tech gains, bets on Big Blue

"Earnings prospects for companies in the information technology (IT) sector are surprisingly resilient, and one of the best-placed and most recession-resistant IT stocks is IBM (NYSE: IBM)," notes Elliott Gue.

In Personal Finance, he adds, "In the recession of 2001, tech stocks were among the hardest hit groups in the S&P 500, but that was mainly a hangover from the technology bubble of the late 1990s that saw many big-cap tech firms soar to unprecedented valuation levels.

"The tech sector today bears no resemblance to what it was in the early part of this decade. The S&P 500 IT sector now trades at a slight valuation premium to the S&P 500 as a whole, and many of the largest names have impressive, cash-heavy balance sheets.

Continue reading IBM: For tech gains, bets on Big Blue

Pipeline profits: High yields from MLPs

This post is part of a 12-article feature that can be read here: Today's best income ideas.

"Master limited partnerships have been among the market's most stable and reliable groups; but 2008 was a painful exception, with the benchmark index down nearly 37%, the worst performance in its 13-year history," says Elliott Gue.

In Personal Finance he now sees a "great opportunity" for investors to takes positions in this high-yielding sector. Here's a trio of favorite investment plays in the MLP arena.

Continue reading Pipeline profits: High yields from MLPs

Schlumberger: 'Best of breed' in oil services

"Long term, supply remains the key issue to watch in the crude oil market; depressed prices continue to force producers to scale back on exploration and development spending," says energy expert Elliott Gue.

In The Energy Strategist, he says, "I watch oil service giant Schlumberger (NYSE: SLB) as a gauge of overall health in energy markets; it has its hands in just about every imaginable oil- or gas-producing market on the planet."

"Schlumberger's fourth quarter earnings release and conference call were far and away the most bearish from the company in at least five years.

"CEO Andrew Gould was notably downbeat, particularly during the analysts' question and answer (Q&A) session. Predictably, earnings estimates have plummeted since that call.

Continue reading Schlumberger: 'Best of breed' in oil services

Obama's plans boost electronic medical records firms

"One of my favor defensive sectors is healthcare," says Elliott Gue; the contributing editor to Personal Finance looks to Quality Systems (NSDQ: QSII), a company that helps automate medical records.

Quantitative analyst Richard Moroney also sees opportunity in the same niche sector. In his Upside newsletter, he looks to a competing play, Cerner (NASDAQ: CERN). Here are their reviews.

"The President made health care a centerpiece of his campaign, including investments in health care-related information technology (IT).

"Health care IT systems can save doctors' offices and hospitals significant administrative costs as well as prevent mistakes. In addition, some major health insurance firms are already putting heavy pressure on their physician networks to adopt these systems."

"Medical offices and hospitals are seeking to automate many functions, from storing patient records online to automatically submitting insurance claims for reimbursement.

"It's estimated that as much as 90% of health care records at smaller medical practices are still maintained in paper form, while even bigger hospitals keep close to half of their records manually.

"Quality Systems, a holding in our growth portfolio, is a leading provider of such systems. It sells software used to manage electronic patient records, billing, scheduling and other common administrative functions for medical and dental practices.

Continue reading Obama's plans boost electronic medical records firms

Speculative flyers: Delta (DAL) and US Airways (LCC)

"If there's one sector that stands to benefit handsomely from a further slide in oil or, at least, a moderation in crude's rally: the airlines," explains energy sector expert Elliott Gue.

In The Energy Strategist, he says, "Airlines may make a terrible long-term investment but can be an outstanding short-term trade." Here he looks at Delta Air Lines (NYSE: DAL) and, for the even more speculatively-inclined, US Airways (NYSE: LCC).

"Some investors will rightfully cringe from any mention of this sector; after all, the airlines have consistently lost money throughout their post-deregulation history.

"Most of the majors have declared bankruptcy on multiple occasions since that time. However, we've traded the airlines on a few occasions; we took some triple-digit percentage gains in the airlines back in 2005.

"The airlines' leverage to oil prices is well known. Expectations are so low, in fact, that several major air carriers actually managed to beat consensus expectations in the second quarter.

"And although sentiment is already at rock-bottom, there's a real basis for cautious optimism. First, if I'm right about oil, fuel costs won't rise appreciably in the third quarter. This huge headwind is dissipating.

Continue reading Speculative flyers: Delta (DAL) and US Airways (LCC)

Union Pacific (UNP): 'Railroad renaissance'

"Railroads are a play on three big secular themes: the drive for increased energy efficiency, growth in coal and the agriculture boom," says Elliott Gue, a energy sector expert who has just returned from Japan where he was covering the G8 Summit.

Meanwhile, in his The Energy Srategist, he states, "Railroads are now among the most fuel-efficient forms of freight transport available." Here, he offers a bullish review of Union Pacific (NYSE: UNP).

"My long-held thesis on the group has been that the railroads are no longer totally dependent on the US economy for their growth.

"It's no longer appropriate to look at this sector as viciously economy sensitive. The traditional relationship between the broader market and the rails has been breaking down for several years, but this trend appears to be accelerating.

"In 2007, according to the Association of American Railroads (AAR), the average railroad moved a ton of freight a distance of 436 miles on a single gallon of diesel fuel. That makes freight trains roughly three to four times more fuel efficient than trucks.

"Union Pacific is the largest railroad in the US and has long been one of my favorites. The company's network is nearly 33,000 miles long and is concentrated in the West and Midwest. It also offers a convenient example of the bullish forces at work for the rails, particularly in the coal and agriculture industries.

Continue reading Union Pacific (UNP): 'Railroad renaissance'

Investing in wind power

"Alternatives may not be an important source of electricity, but they are the fastest-growing subsector in the energy space," says energy sector expert Elliott Gue in Personal Finance. Here, he looks at wind power.

"The US Energy Information Administration (EIA) projects that wind power will grow by more than 7%, encouraged by generous government subsidies. Compare that to just 1.5% annualized projected growth in total electricity demand.

"The world's largest wind turbine producer, Vestas Wind Systems (OTC: VWSYF), fell on hard times back in 2005. It priced some of its turbines too aggressively and saw a surge in warranty claims because of defective components.

"But the stock appears back on track. Warranty provisions are down to 5% of revenues. Profit margins surged 4 percentage points year-over-year because of more rational turbine pricing. Vestas' current backlog stands at EUR4.1 billion (US $6.03 billion), up more than 30% year-over-year.

Continue reading Investing in wind power

Best Stocks for 2008: Acergy (ACGY) rises from subsea services

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My favorite aggressive recommendation for 2008 is Acergy (NASDAQ: ACGY)," says Elliott Gue, editor of The Energy Strategist.

"Acergy provides engineering and construction services for offshore oil and gas developments with a particular focus on deepwater projects. Acergy's most important business is what's known as SURF -- subsea umbilicals, risers and flowlines.

"SURF relates only to wells that are developed with subsea completions, meaning that the well is installed directly on the seafloor. When wells are installed on the seafloor, operators need ways to control the well remotely.

"This is done via electrical and hydraulic systems; umbilicals are nothing more than electrical and hydraulic cables that connect a surface-based platform to subsea wells. The term riser refers to a flexible steel pipe that connects underwater pipelines or wells to surface-based floating production platforms. Risers actually carry oil and/or gas from subsea developments to the surface.

"Finally, flowlines are smaller diameter pipes used to transport oil and gas underwater. Obviously, all subsea developments require the installation of SURF. Acergy's heavy concentration in this area gives it extraordinary leverage to deepwater.

Continue reading Best Stocks for 2008: Acergy (ACGY) rises from subsea services

Best Stocks for 2008: Pipeline profits from Kinder Morgan Partners (KMP)

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My favorite conservative recommendation for 2008 is Kinder Morgan Energy Partners (NYSE: KMP)," says Elliott Gue, editor of The Energy Strategist.

"Kinder has four basic business lines: oil pipelines and terminals, carbon dioxide (CO2) pipelines, natural gas pipelines and refined products pipes.

"Refined products pipelines are among the most stable assets a firm can own. Typically, they're dedicated to servicing a particular group of refineries, and volumes tend to grow at a slow but predictable rate over time. In Kinder's case, this is a simple, fee-based business. The company owns the valuable Plantation Pipeline that carries refined products from Gulf Coast refineries to the Mid-Atlantic.

"And the company's Pacific Pipeline carries refined products west to California. The West Coast is one area of the US that's chronically short of refining capacity. Pipelines carrying refined products from the Gulf are the only way California keeps moving.

Continue reading Best Stocks for 2008: Pipeline profits from Kinder Morgan Partners (KMP)

Top Picks 2007: Elliott Gue sees growth & income in gas MLP

Each 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 Stocks Report.

Enterprise Products Partners (NYSE: EPD), a master limited partnership (MLP), is the top conservative pick for 2007 from energy expert Elliott Gue, editor of The Energy Strategist.

"MLPs trade on the major exchanges just like any stock. But there are some big tax benefits to owning MLPs, offering a combination of high current income and the potential for that income to grow rapidly over time.

"Enterprise Products is the largest MLP in the U.S. Unlike most other big MLPs, Enterprise hasn't slowed its distribution growth substantially in recent years. In fact, the MLP has maintained an impressive 9%+ annualized growth rate in distributions during the past five years. .

Continue reading Top Picks 2007: Elliott Gue sees growth & income in gas MLP

Top Picks 2007: Elliott Gue mines for value in uranium

Each 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 Stocks Report.

Energy Metals (NYSE: EMU) is the favorite speculative pick for 2007 from Elliott Gue. The editor of The Energy Strategist explains, "The supply/demand balance for uranium is tighter than for just about any other major commodity; supply of natural uranium from mines just isn't enough to cover even current demand. And with a global building boom for nuclear power plants underway, demand for uranium is only going to rise.

"In late October, uranium mining giant Cameco announced that it was experiencing uncontrollable water inflow into one of its key new mine projects, delaying the project from in early 2008 to, perhaps, mid-2009 for this mine.

"By around 2008, some utilities will be running low on uranium inventories to fuel their existing reactors. And there aren't many other sources of uranium out there to fill the void. For an aggressive play on this trend, consider Energy Metals. The stock, previously only listed in Toronto, recently listed its shares on the NYSE.

"While Energy Metals is headquartered in Canada, most of its projects are located in the U.S. Its Hobson facility in Texas is a licensed processing plant that is currently capable of processing 500,000 pounds of uranium oxide (yellowcake) annually from ISL liquids. This plant could produce as much as 1 million pounds of yellowcake annually once EMU completes upgrades to the facility.

Continue reading Top Picks 2007: Elliott Gue mines for value in uranium

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Last updated: November 10, 2009: 04:37 AM

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