"Earlier, there was some concern that a U.S. recession would dampen worldwide demand for oil, and that could still happen. But right now, the rapidly increasing consumption of crude oil by emerging markets is actually exceeding any declines in industrial nations.
"Kinder Morgan is an energy partnership that transports more than 2 million barrels of energy products every day - gasoline, jet fuel, natural gas liquids and more. It has two additional profit centers: Mammoth oil and gas storage facilities and a business supplying carbon dioxide, which is used to boost production from aging oilfields.
"All three of these businesses can be extremely lucrative in a rising oil market like this one. That's how KMP generated a record profit of $347 million in the first quarter - a big swing from a year-earlier loss of $150 million.
"Partnerships like Kinder pay out quarterly dividends to 'unit holders' - the equivalent of shareholders in traditional public corporations. And KMP's latest payout is 96 cents per unit, up from 92 cents in the prior quarter and 83 cents a year earlier. The indicated yield is a hefty 6.5%.
"As much as we like KMP, we recognize that energy shares may be extended and could pull back in the near term. So here's what we suggest you do: Buy a half-position in KMP this month. Then hold back an equivalent amount of cash earmarked for a possible second bite at the apple later."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
TheStreet.com's Jim Cramer says lots of companies now thrive with crude up here.
Oil's not a tax on everything -- it's a tax on the consumer. That's what I come down to when I see the charts this weekend and ponder what's happening in so much of industrial America.
Company after company that I examine -- the new techs, as I call them -- actually benefit from higher oil prices. Or they can pass them on with ease, because of the worldwide demand being so strong.
Take all of the companies involved with making a Boeing (NYSE: BA) (Cramer's Take): Boeing itself, Alcoa (NYSE: AA) (Cramer's Take), Honeywell (NYSE: HON) (Cramer's Take) and Precision Castparts (NYSE: PCP) (Cramer's Take) being good examples. Each of these is necessary because the new Dreamliner burns lots less fuel, and with fuel the biggest airline cost, it stands to reason that higher energy prices make the plane more desirable even at a higher price point.
"We don't have to leave the US to find plenty of bargain buys in partnerships and pass-throughs," says Neil George in his new specialty service designed for income investors, The Partnership Letter.
"Right now plenty of partnerships and pass-through entities in the US and around the world are down in price. The real work comes in finding and buying partnerships that have solid, heavy-cash-generating assets that make for bargains.
"And they need to pass two other tests. The first is that they need to be financially sustainable. With the ongoing credit crunch, partnerships we own need to be able to carry themselves without having to face a cash crunch.
"The second test is one of business sustainability: Can the operation behind the partnership keep running and expanding even if the global economy slows? are widely held by investors. And though neither has been relegated to the bargain, both represent solid deals.
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.
"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.
"More than two years after selling Kinder Morgan Energy Partners (NYSE: KMP) for a 60% gain, we are once again buying the shares," says Bill Martin in his FindProfit advisory newsletter.
He explains, "A heavily diversified operator of pipeline and other energy-related assets and the largest master limited partnership (MLP) in the U.S., KMP currently has a 6.85% yield that we think will grow to 7.5% or greater in 2008 based on the current stock price.
"This growth will be powered by a deep portfolio of new growth projects, most notably the company's Rockies Express pipeline, Mid-Continent Express Pipeline, and Trans Mountain pipeline.
"KMP is extremely well positioned to benefit from the prime sources of North American energy supply growth over the next several years, including the Barnett Shale in Texas, the Rocky Mountains, the oil sands of Canada, and the new LNG import facilities in Texas and Louisiana.
"KMP also should benefit from higher oil prices over the next two years in its CO2 segment. Together, these projects should enable KMP to grow its distribution payout rate by 7-9% per year over the next several years.
What are the best energy investments for long-term investors? To answer this question, I surveyed 20 of the nation's leading financial newsletter advisors to find their current favorite ideas in the energy sector.
Interestingly, the advisors see the best opportunities in areas well beyond traditional oil firms; indeed, no one included in this report chose a major integrated oil company. Rather, the advisors have shown a preference for various oil services sectors, non-oil energy sources, and developing alternative technologies.
Others chose companies that make specific products needed by the oil & gas industries such as NATCO Group Inc. (NYSE: NTG), which makes a wide range of oil & gas processing systems; Dresser-Rand Group Inc. (NYSE: DRC), a maker of control systems; Gardner Denver Inc. (NYSE: GDI), which makes compressor and fluid transfer systems; Tenaris (NYSE: TS), a maker of pipes and tublar products and Schlumberger Ltd. (NYSE: SLB), the largest and most diversified of the oil services companies.
MOST NOTEWORTHY: Melco PBL Entertainment, Helen of Troy, LHC Group and Oriental Financial were today's noteworthy initiations:
Jefferies initiated shares of Melco PBL Entertainment (NASDAQ: MPEL) with a Buy rating and $21 target, as they believe the possibility of A-Max, a VIP junket consolidator, moving up to 10 junkets to the Crown Casino could lead to short-term gains and notes that MPEL is the only Macau pure play in the U.S. stock market.
Jefferies also started shares of Helen of Troy (NASDAQ: HELE) with a Hold rating and $21 target, as they sees risks to near-term EPS from soft consumer demand and gross margin pressures.
Credit Suisse expects LHC Group's (NASDAQ: LHCG) rural-focused strategy and joint venture partnerships to drive organic growth and started shares off with an Outperform rating and $26 target.
Oriental Financial Group (NYSE: OFG) was initiated at B. Riley with a Neutral rating and $12.50 target. The firm does not expect significant multiple expansion from current levels given the slow Puerto Rican economy.
Copano Energy (NASDAQ: CPNO) - Volatility Elevated into EPS & lower energy prices. CPNO is an energy company with natural gas gathering and intrastate transmission pipeline assets and natural gas processing facilities Oklahoma & Texas Gulf coast region. WTI Crude futures are down 3.56% to $72.79 according to Track Data. CPNO will announce EPS on 8/8. CPNO August option implied volatility of 41 is above its 12-week average of 20 according to Track Data, suggesting larger risk.
Enterprise Products(NYSE: EPD) - Implied volatility of 40 above 26-week average of 17. EPD transports natural gas, NGL's and crude oil through more than 35,000 miles of onshore and offshore pipelines. EPD September put implied volatility of 40 is above its 26-week average of 17 according to Track Data, suggesting larger risk.
Kinder Morgan Energy Partners (NYSE: KMP) - September volatility Elevated. KMP owns or operates 26,000 miles of pipelines and approximately 150 terminals. KMP September option implied volatility of 50 is above its 26-week average of 14 according to Track Data, suggesting larger risk.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Founded in 1998 when two well-established California utilities merged, Sempra Energy (NYSE: SRE) develops energy infrastructure, operates utilities and provides natural gas and energy services to more that 29 million consumers in the U.S., Canada, Mexico, Europe, South America and Asia. Headquartered in San Diego, it is the city's largest Fortune 500 Company and its growth is aggressive.
Its huge size is one of its best assets, allowing it to be competitive in markets here and abroad. It also has been smart in its foray into liquefied natural gas, and in its use of cash. Instead of offering a big dividend, it has reinvested its cash into investments with high yields. So, in addition to servicing the largest customer base of any energy utility in the U.S., it also sells energy commodities, builds and runs energy infrastructure, and provides asset risk management. It is building three liquefied natural gas import facilities in North America, and has formed a smart pipeline partnership with Kinder Morgan Energy Partners LP (NYSE: KMP) to bring natural-gas from the Rocky Mountains, where it is abundant, to the Midwest.
It also is getting into the fast-growing renewables field. In late June, SRE's subsidiary, Sempra Generation, announced it is entering the renewable-energy-development business. Its first project is a 250-megawatt wind-power generation facility in Baja California, Mexico.
MOST NOTEWORTHY: Leap Wireless (LEAP), Cergaon Networks (CRNT), Cinemark (CNK), Regal Entertainment (RGC) and Ocean Power Tech (OPTT) were today's noteworthy initiations:
Leap Wireless International Inc. (NASDAQ: LEAP) was initiated with an Outperform rating and $103 target at Pacific Crest, as the firm believes the company's long-term opportunity with new-market expansion is underappreciated.
Pacific Crest also initiated shares of Ceragon Networks Ltd. (NASDAQ: CRNT) with an Outperform rating and $12 target, as the firm believes accelerating wireless data growth is driving backhaul demand.
Cinemark Holdings Inc. (NYSE: CNK) was initiated with an Overweight rating at Morgan Stanley, a Buy rating and $21 target at Banc of America and a Buy rating at Merrill Lynch; Banc of America believes the current box office strength could drive upside to estimates.
Morgan Stanley also initiated shares of Regal Entertainment Group (NYSE: RGC) with an Equal Weight rating.
Ocean Power Technologies Inc. (NASDAQ: OPTT) was initiated with a Buy rating and $24 target at Banc of America and a Neutral rating at First Albany.
OTHER INITIATIONS:
Telanetix Inc. (NASDAQ: TNXI) was initiated with a Buy rating and $8.50 target at Kaufman Bros, as the firm believes the company's market opportunity is significant and thinks it could be an interesting acquisition target if the telepresence market development accelerates.
Banc of America initiated shares of OceanFreight Inc. (NASDAQ: OCNF) with a Buy rating and $23 target.
Abbott Laboratories (NYSE: ABT) opened at $56.01. So far today the stock has hit a low of $55.98 and a high of $56.45. As of 11:00 this morning, ABT is trading at $56.14, up $0.33 (0.6%).
The stock has been gaining steadily over the past four months, establishing a new one year high of $57.26 last week. Jim Cramer featured this stock on his Mad Money TV show last night as a top defensive buy. Cramer pointed out that it is time to start thinking about solid defensive stocks given the current concerns about Iran. Considering the worst case scenario, Cramer believes that ABT will be the best stock to own, should tensions escalate. Cramer also mentioned Yamana Gold Inc. (NYSE: AUY) and Kinder Morgan Energy Partners (NYSE: KMP) as good stocks for this "doomsday portfolio." The technical indicators for ABT have been bullish and slightly deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $52.50 range. ABT hasn't been below $52.50 since January and has shown support around $55 recently. This trade could be risky if ABT breaks out of its year-long uptrend, but even if the stock slips a little, it could find support from its $50 day moving average, which is around $53 and rising.
Brent Archer is an analyst on the move at Investors Observer. (Free Subscription)
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.
On last night's MAD MONEY on CNBC, Jim Cramer discussed the ramifications of Iran if things get worse. He laid out a "what to do" plan if you wake up one morning and the headlines are horrible. He has a four point strategy for an "Iran Gone Awry" scenario:
First, a drug company, because drug companies don't need a strong economy. Cramer likes Abbott Laboratories (NYSE: ABT), which is even more immune to other drug company problems because it is at its highs. (He doesn't like Pfizer Inc. (NYSE: PFE), Merck & Co. (NYSE: MRK) or Bristol-Myers Squibb (NYSE: BMY)). The 16x P/E and the 14% growth rate make ABT cheap and it sold off two units. He likes its Humira drug as a multi-purpose drug and its stent looks like it may be the best out there.
Second, a company tied to oil, but one that won't get hurt if we get cut off from Middle East oil. Cramer chose Kinder Morgan Energy Partners (NYSE: KMP) but he warns not to buy the wrong Kinder Morgan. This one is a safer high-yield one, he says as it transports via its pipelines and transfers other commodities besides oil and gas.
For 25 years, Steven Halpern, editor of 
"My favorite conservative recommendation for 2008 is 
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Founded in 1998 when two well-established California utilities merged, 
Abbott Laboratories
Alcoa's Q2 2008 earnings transcript
Anheuser-Busch (BUD) sues InBev, what's next?
Wal-Mart might help your portfolio during the recession
