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GE Signals Volatility for Energy Futures

Gary Sattler — Wed, 06 Oct 2010 14:00:00 EST

Filed under: Deals, Good news, General Electric (GE), Commodities, Stocks to Buy

A strong signal has been sent today by General Electric Co. (GE) regarding energy futures. Pending regulatory approval, GE has penned a deal to acquire Dresser Inc. for $3 billion, thus expanding its reach and capabilities in the realm of natural gas extraction and usage. Dresser's products include technology for gas engines, control and relief valves, measurement, regulation and control systems for gas and fuel distribution.

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GE Signals Volatility for Energy Futures originally appeared on BloggingStocks on Wed, 06 Oct 2010 14:00:00 EST. Please see our terms for use of feeds.

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Petroleo Brasileiro: Profit from those rising prices at the gas pump

Joseph Lazzaro — Thu, 26 Jun 2008 18:15:00 EST

Filed under: Brazil, Stocks to Buy

Readers of this space know that one argument I forward here is that in the era of elevated energy prices, oil/natural gas companies are likely to remain promising plays for the foreseeable future, barring the discovery of a cheap, widely-available, alternative energy. And among oil/natural gas companies, Petroleo Brasileiro is worth a review.

Petroleo Brasileiro SA Petrobras (NYSE: PBR) is Brazil's largest industrial operation, with oil/gas production, refining and purchasing businesses, and oil/gas transport services.

(Note: Petroleo's shares split 2-for-1 in May 2008.)

Analysts really like PBR's proved reserves of 15 billion barrels of oil equivalent, 12,900 wells, 16 refineries, 31,000 kilometers of pipeline, and astounding 5,870 gasoline stations. Further, analysts see 2008 production rising about 11-14%. The Reuters F2008/F2009 EPS consensus estimates for PBR are $4.91/$5.03.

The risks? Analysts have their eye on PBR's operating costs. Also, PBR's concentration in Brazil means a downturn in that country's economy will hurt results.

Stock Analysis: Petroleo Brasileiro is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from PBR's shares. Sell / Stop Loss if you were to purchase shares in this company: $78.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

Petroleo Brasileiro: Profit from those rising prices at the gas pump originally appeared on BloggingStocks on Thu, 26 Jun 2008 18:15:00 EST. Please see our terms for use of feeds.

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Superior Energy: Profit from the rise in prices at the gas pump

Joseph Lazzaro — Fri, 20 Jun 2008 15:58:00 EST

Filed under: Stocks to Buy

It doesn't take a Harvard mathematician or a Wall Street investment banker to realize we're in the era of high energy prices.

One way to compensate for the increased energy cost: consider an investment in an oil/oil services company whose fortunes are directly linked to the world's most vital commodity -- oil. With this in mind, Superior Energy is worth a review.

Superior Energy Services (NYSE: SPN) provides specialized oil field services to oil and gas companies operating in the Gulf of Mexico and on the Gulf Coast. The company also sells and rents oil/gas well drill equipment and tools on four continents.

In general, analysts like SPN's rental tools and intervention services businesses, and the fact that SPN's services help oil/gas companies maintain production during seasonal down periods, which anesthetizes SPN somewhat from commodity price volatility.

Further, international expansion opportunities are promising: analysts say additional SPN expansion abroad will lessen the earnings impact of a downturn in key Gulf of Mexico operations. The Reuters F2008/F2009 EPS consensus estimates for SPN are $4.09/$4.84.

The risks? Reduced demand for SPN's production-oriented services and/or a large, sustained decline in energy prices, particularly oil, would hurt SPN's results. Don't look for the latter anytime soon.

The First Call mean rating for SPN is: Buy. [5 firms.] Mean 2008 target: $60. [high: $66, low: $56.]

Stock Analysis: Superior Energy Services is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from SPN's shares. Sell/Stop Loss if you were to purchase shares in this company: $38.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

Superior Energy: Profit from the rise in prices at the gas pump originally appeared on BloggingStocks on Fri, 20 Jun 2008 15:58:00 EST. Please see our terms for use of feeds.

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Don't confuse conglomerate Loews (LTR) with that other company

Joseph Lazzaro — Wed, 16 Jan 2008 17:12:00 EST

Filed under: Stocks to Buy

It goes without saying that diversification is one defense against the onset of a bear market. Further, occasionally the market offers a conglomerate that possesses many of the characteristics of a diversified mutual fund or portfolio, and with the above in mind, Loews is worth a review.

Loews (NYSE: LTR) is a holding company with operations that include property / casualty insurance, hotels, offshore oil/gas drilling, natural gas pipelines, and cigarettes. Don't confuse LTR with that other company with a similar-sounding name: LTR is a conglomerate.

Analysts really like LTR's Diamond Offshore deepwater/midwater oil rig operations, which, as one might sense, are experiencing strong demand and pricing power, given the global drive for more oil. Analysts are equally impressed by LTR's natural gas pipeline business.

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Don't confuse conglomerate Loews (LTR) with that other company originally appeared on BloggingStocks on Wed, 16 Jan 2008 17:12:00 EST. Please see our terms for use of feeds.

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Jacobs Engineering: Two secular growth trends with investor appeal

Joseph Lazzaro — Thu, 10 Jan 2008 16:32:00 EST

Filed under: Oil, Stocks to Buy

The secular growth trends in oil and gas services and infrastructure continue, and a company well-positioned in these two promising sectors, and by extension, worth a review, is Jacobs Engineering Group.

Jacobs Engineering Group (NYSE: JEC) is a diversified engineering/professional technical services company providing services to the chemical, petroleum, pharmaceutical and biotech sectors. The company also has aerospace and defense contracts with the U.S. government.

Analysts expect 14-20% revenue growth for F2008 on strong upstream oil/gas and downstream petroleum refining work. Public transportation infrastructure work also remains solid.

Analysts also like JEC's growth opportunities for chemical projects in the Middle East and Europe. Further, overall margins are expected to improve. The Reuters F2008/F2009 EPS consensus estimates for JEC are: $2.99/$3.59.

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Jacobs Engineering: Two secular growth trends with investor appeal originally appeared on BloggingStocks on Thu, 10 Jan 2008 16:32:00 EST. Please see our terms for use of feeds.

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With FMC Tech (FTI), it's control the flow, not go with the flow

Joseph Lazzaro — Tue, 08 Jan 2008 16:09:00 EST

Filed under: Oil, Stocks to Buy
When one can combine systems technology and oil services, that company is worth an evaluation, and FMC Technologies fits the bill.

FMC Technologies (NYSE: FTI) designs and manufactures services, technology systems and products for energy systems, food operations, and airport systems.

Analysts really like FTI's energy systems business, which helps companies control the flow of oil/gas producing wells, among other tasks. As of September 2007, FTI had an energy systems order backlog of $3.3 billion, up more than 65% from a year earlier.

Overall, analysts see revenue increasing 14-17% in 2008, after a likely 12-15% gain in 2007. The Reuters F2007/F2008 EPS consensus estimates for FTI are $2.21/$2.79.

The risks? Analysts are keeping an eye on subsea drilling activity. Also, a sustained, substantial drop in oil's price will no doubt affect oil/natural gas companies' service budgets, and FTI's operations.

The First Call mean rating for FTI is: Hold. [22 firms.] Mean 2008 target: $64.00. [high: $80, low: $47.]

Stock Analysis: FMC Technologies is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from FTI's shares. Sell / Stop Loss if you were to purchase shares in this company: $36.

DISCLOSURE: Joseph Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
With FMC Tech (FTI), it's control the flow, not go with the flow originally appeared on BloggingStocks on Tue, 08 Jan 2008 16:09:00 EST. Please see our terms for use of feeds.
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The profits aren't accidental for Occidental

Joseph Lazzaro — Fri, 30 Nov 2007 16:00:00 EST

Filed under: Commodities, Oil, Stocks to Buy
Readers of this space know that a preferred sector given current U.S. economic and global growth conditions is the oil / oil services sector.

Further, a mild oil price pull-back does not change the sector's outlook, nor does it change the prospects for Occidental Petroleum (NYSE: OXY).

Occidental has what many analysts like: a geographically diverse reserve base, demonstrated production, substantial liquidity, and ample reserves.

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The profits aren't accidental for Occidental originally appeared on BloggingStocks on Fri, 30 Nov 2007 16:00:00 EST. Please see our terms for use of feeds.
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Diamond Offshore has precious equipment

Joseph Lazzaro — Fri, 30 Nov 2007 13:13:00 EST

Filed under: Commodities, Oil, Stocks to Buy
Despite the oil market's recent correction / minor pullback, oil remains at an elevated price, and the outlook for the oil and oil services sector remains solid.

And one oil service company worth an evaluation is Diamond Offshore (NYSE: DO).

Diamond is a contract driller of offshore oil and gas wells, with a concentration in deepwater drilling. The company has a strong fleet of floater rigs: dayrates for these rigs will continue to increase at double-digit rates, a market condition that reflects their increased value stemming from higher energy prices, and some pricing power for DO.

Further, Diamond has an impressive geographical footprint (rigs operating in the Gulf of Mexico, North Sea, South America, Africa, Australia, and Southeast Asia) and superior client diversification (51 customers). The Reuters F2007/F2008 EPS consensus estimates for DO are $6.75/$11.89.
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Diamond Offshore has precious equipment originally appeared on BloggingStocks on Fri, 30 Nov 2007 13:13:00 EST. Please see our terms for use of feeds.
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Oceaneering earns its living in far-flung places

Joseph Lazzaro — Tue, 27 Nov 2007 19:58:00 EST

Filed under: Middle East, Mexico, Canada, Commodities, Oil, Stocks to Buy
It goes without saying that every defensive stock category is being tested in this market.

Moreover, while no sector is 100% bullet-proof from a market that seems to look for an excuse to decline another 200 points, the oil and oil services sector has fared reasonably well, and in this category Oceaneering International (NYSE: OII) is worth a review.

Oceaneering is an advanced technology company servicing the oil and gas industry, among others. It focuses on providing underwater drilling support, construction, inspection and repair services to oil/gas companies.

As one might estimate, OII's fortunes are tied to the strength of oil/natural gas prices and with prices at near-record levels, OII's business is strong and likely to remain so: most analysts see a long, strong, global deepwater oil services cycle.
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Oceaneering earns its living in far-flung places originally appeared on BloggingStocks on Tue, 27 Nov 2007 19:58:00 EST. Please see our terms for use of feeds.
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National Oilwell likes the long-term view

Joseph Lazzaro — Tue, 27 Nov 2007 13:39:00 EST

Filed under: Exxon Mobil (XOM), Chevron Corp (CVX), ConocoPhillips (COP), BP p.l.c. ADS (BP), Commodities, Oil, Stocks to Buy
It doesn't take a geologist or an oil sector engineer to figure out that oil / energy-based companies are in demand in this era of elevated energy prices. And when these companies need parts for maintenance, that's where National Oilwell Varco (NYSE: NOV) comes in.

National Oilwell designs, manufactures and markets components and systems used in oil and gas drilling/production. Here's a telling statistic regarding NOV's involvement: more than 90% of mobile offshore rigs and a majority of land rig use components manufactured by NOV. Those are Microsoft (NASDAQ: MSFT)-type usage numbers.

In general, analysts see continued, strong EPS growth for NOV: the growth in offshore rig newbuild orders may decelerate in 2008, but overall orders should nevertheless remain strong in 2008. The Reuters F2007/F2008 EPS consensus estimates for NOV are $3.72/$4.53.

Another positive: It's important to note that slowing newbuild orders will not spell the end of NOV's solid returns on equity. The reason? The world's stock of rigs is deteriorating, with the average rig exceeding its designed life expectancy. In other words, there are lots of older rigs in use, replacing or upgrading these rigs will generate substantial work for NOV, and these tasks are destined to remain high-margin activities.

The First Call mean rating for NOV is: Buy. [19 firms.] Mean 2008 target: $81.30. [high: $90, low: $63.]

Stock Analysis: National Oilwell is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than one year should be rewarded from NOV's shares. Sell / Stop Loss if you were to purchase shares in this company: $49.
National Oilwell likes the long-term view originally appeared on BloggingStocks on Tue, 27 Nov 2007 13:39:00 EST. Please see our terms for use of feeds.
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Analyst upgrades 6-06-07: MCO, NGS; BAS and CPX

Eric Buscemi — Wed, 06 Jun 2007 10:05:00 EST

Filed under: Analyst Reports, Analyst Upgrades and Downgrades, Johnson Controls (JCI), Goldcorp Inc (GG)
MOST NOTEWORTHY: Oil and gas services companies, mining companies and Moody's Corporation (NYSE: MCO) were today's noteworthy upgrades:

Morgan Keegan upgraded Natural Gas Services Group Inc (AMEX: NGS), Basic Energy Services Inc (NYSE: BAS) and Complete Production Services Inc (NYSE: CPX) to Outperform from Market Perform and Patterson-UTI Energy Inc (NASDAQ: PTEN) to Market Perform from Underperform, as the firm has a bullish outlook for drilling activity in the back half of 2007 and into 2008.

JP Morgan upgraded shares of both Compania de Minas Buenaventu (NYSE: BVN) and Goldcorp Inc (NYSE: GG) to Overweight from Neutral on valuation.

Moody's was upgraded to Overweight from Equal Weight at Morgan Stanley, citing increased confidence in revenue outlook and growth drivers.

OTHER UPGRADES:

Inverness Medical Innovations Inc (AMEX: IMA) was upgraded to Buy from Hold at Stifel Nicolaus.

Credit Suisse upgraded shares of Johnson Controls Inc (NYSE: JCI) to Outperform from Neutral, citing growth outlook in the company's building efficiency business.

Allianz SE (NYSE: AZ) was upgraded to Buy from Add at WestLB on valuation and the company's strong Q1 results.

Analyst upgrades 6-06-07: MCO, NGS; BAS and CPX originally appeared on BloggingStocks on Wed, 06 Jun 2007 10:05:00 EST. Please see our terms for use of feeds.
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Powerful numbers on Matrix Service Company

Eric Buscemi — Mon, 04 Jun 2007 14:30:00 EST

Filed under: Bargain Stocks, Stocks to Buy
Gasoline inventories dropped below their five-year average and are now 6% below last year's average, according to Joseph Dancy, an adjunct professor at Southern Methodist University, in an essay published in Barron's this weekend.

This means the outlook for investing in energy remains good, Dancy believes, as demand for gasoline will grow 2% with little supply relief in sight. Particularly the lack of new refinery capacity means positive growth prospects for a company like Matrix Service Company (NASDAQ: MTRX) that specializes in repair and maintenance services to the refining, distribution and pipelines sectors.

Dancy wrote the supply and demand balance for energy could mean a sharp escalation of energy prices. Mexico's Cantarell field's output, the second largest in the world as measured by output, declined 17% in March from year-earlier levels, while offset by new production increases at a nearby field, total crude production from Mexico is down 5%. In addition, Venezuela production should get hit at some point as Chavez has taken control of exploring for and producing energy away from the foreign experts. And Nigeria, who sends 1 million barrels per day to the US, is also in a politically tenuous situation.

Add to this, the huge swing producer, Saudi Arabia, announced that is will no longer increase production after 2009, which might indicate the nature of its oil reserves.

In addition to Matrix, Arena Resources Inc (NYSE: ARD), OMNI Energy Services Corporation (NASDAQ: OMNI), Pioneer Drilling Company (AMEX: PDC), Natural Gas Services Group Inc (AMEX: NGS) were mentioned as attractive investment ideas.
Powerful numbers on Matrix Service Company originally appeared on BloggingStocks on Mon, 04 Jun 2007 14:30:00 EST. Please see our terms for use of feeds.
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