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Top 10 Energy Stocks To Buy

Top 10 Energy Stocks To Buy

 Screen Shot 2013-06-23 at 9.52.34 PMAcross the board, 2013 has already been a strong year for oil and natural gas companies and we’re only five months into the year! What we have seen is that many of these oil and natural gas stocks have already made double digit gains on the year alone. This is one of the main reasons we have decided to focus this week on getting you invested in the right energy stocks.

When it comes to energy stocks, all we have been seeing is huge gains across the board and that’s why we believe this is a great time to invest in the energy sector. More importantly, we believe American based energy companies are set to produce some of the biggest returns over the next few years as there is a lot of speculation that we are entering an American Energy Boom that will propel these stocks higher. So here you go, our list of our Top 10 Energy Stocks:

Halliburton (NYSE: HAL) Projections: +57.2%

images-3A little over 19 months ago, we first recommended investors to BUY Halliburton as we saw it as a strong long-term investment. During those long 18 months, we unfortunately have nothing to show for it as shares are now trading at the same levels of where they were when we first initially invested. Our timing for HAL was originally wrong as we invested at the wrong moment as shares fell over 40% in the first 9 months due to falling oil prices and overall weakness in our global economy. Since then however, HAL has recovered quite nicely as shares are up +27% over the past 6 months and up +40% over the course of the past year as share prices are now back to where they were when we first initially invested. Fundamentally we still like Halliburton for all the same reasons, read our original article to find out more details.

Halliburton (NYSE: HAL) Poised to Pop: Good Times Ahead 

Going forward, HAL’s outlook is very bullish with 91% of analysts covering HAL issuing a BUY rating or higher. Overall there are 32 analysts currently covering HAL and all but 3 think it’s a great BUY opportunity. If that doesn’t make you feel comfortable then maybe this will, HAL is represented in the equity portfolio of Soros Fund Management who holds a $34 million stake.

2013 has been a good year for HAL investors for several reasons. For one, HAL’s share price has appreciated +18% year-to-date, secondly in February Halliburton announced a +39% increase in its quarterly dividend to $0.125 per share, and finally in its most recent quarter (Q1 2013), the oil and gas E&P play reported a record $7.0 billion. Halliburton’s management has stated that it’s focused on improving North American margins in the intermediate-term and we have no reason to doubt that they won’t accomplish this goal, as historically they have always been one of the most efficient management teams worldwide. If you’re looking from George Soros point of view, he might see HAL as the best way to play America’s energy boom.

Halliburton’s strength in the tight oil and gas space is underrated. Trading at 10.7 times forward earnings, HAL is cheap especially compared to its peers. Going forward we are very optimistic about HAL’s long-term outlook and believe that the company will continue to outperform against their competition and we believe they will position themselves as the leader of the American energy boom. As a result, we believe shares of HAL will be trading at $65 per-share 12-months from now which included with their annual dividend of 1.20% works out to be a total net yield of +57.2%.

Rex Energy (NYSE: REXX) Projections: +21%

oil-stocks330Rex Energy has been a favorite of ours along with being one of our top-performing stock picks for both 2012 and 2013. We first recommended REXX as a strong BUY opportunity around a year ago. In that short time period, shares have soared over +78%. This probably lead to many investors to sell off their whole position thinking that the stock couldn’t rise any higher without however actually reanalyzing the company’s past and future performance, long-term projections, and overall outlook to see if there in fact is more potential still there. We did in fact take the time to reanalyze REXX and what we found was that while it had been a great year there was nothing to suggest that this run would stop or that REXX would lose value going forward. In fact, many key indicators led us to continue to be bullish on REXX. We did however sell half of our position recommending our readers to do the same as in case of a market correction it would protect our portfolio allowing us to play with the houses money rather than still having all our original starting capital at risk. To find out why we like REXX going forward simply click on the LINK below:

After A Successful Rally, Rex Energy Is Ready To Soar Even Higher

Going forward we expect REXX to continue to outperform their peers and have placed a 12-month price target of $20 per share, a total net yield of +21%.

Range Resources (NYSE: RRC) Projections: +27%

Natural-Gas-StationRange Resources stock price has steadily climbed throughout the past year as shares are up +21% year-to-date and +38% over the course of the past 12 months. Going forward, there is nothing to doubt that RRC won’t continue to rise higher as the company foresees production to grow between 20% to 25% over the course of the next few years. RRC’s total resource potential is estimated to be anywhere between 50 to 70 trillion cubic feet equivalent of natural gas. Being a low-cost producer, RRC should yield exceptional profits from these upbeat production numbers.

We also believe that RRC’s new strategy and focus on per-share growth instead of focusing on growth at all costs will be a big driving force for the company going forward and we believe it will be a key factor in sending share prices even higher. With increased production and exports expected to continue to grow there is little to suggest that Range Resource’s stock won’t stop continuing to steadily rise higher. In fact, we think RRC will be a big winner going forward and we expect shares prices to hit $95 over the course of the next 12 months, a total yield of +27%.

Southwestern Energy (NYSE: SWN) Projections: +40%

saupload_oil_stock330Southwestern Energy has made some key recent capital investments that we believe will only further strengthen the company’s long-term outlook as well as sending share prices significantly higher. SWN recently doubled down on its Marcellus acreage, purchasing 162,000 acres from Chesapeake Energy for $93 million. Being the discoverer of the Marcellus play, SWN made the most of its first-mover advantage as they have continued to improve their operations within the acreage. This strategic investment has greatly strengthened SWN’s overall outlook going forward leading to an increase in their overall projections across the board.

Even as SWN expands, the bulk of their assets are still in the Fayetteville Shale. SWN’s strategic capital investments have been crucial providing the company with a low-cost structure that will help SWN profit even if gas prices were to fall or weaken. Shares of SWN rose +37% over the course of the past year, to many investors that is a great return but when you dig deeper and see the long-term potential you realize that SWN is just getting started. The combination of both SWN’s smart and strategic investments along with their luck in what they discovered has led to increased optimism on SWN’s overall long-term outlook. These findings have also led to many analysts across Wall Street upping their projections adding an additional +30% upside to SWN from current levels.  The biggest news of all might be that SWN’s recent acquisitions has led to them becoming a new position in the hedge fund managed by George Soros, the fund disclosed a $16.7 million position in Southwestern Energy.

Following a strong first quarter where SWN posted an annual increase in production of 11% along with earnings of $0.36 per share versus $0.30 EPS just a year ago representing solid growth. Add in the recent developments, acquisitions, and investments and SWN has become a much more interesting play and one that holds a lot more potential and value now going forward. We project shares of SWN to be trading at $52 per-share 12-months from now, a total net yield of +40%.

Ultra Petroleum Corp (NYSE: UPL) Projections: +63%

images-2Just like RRC, Ultra Petroleum is another low-cost producer utilizing a new strategy to increase overall future production. UPL are now using their cost position to focus on profitable growth. UPL has cut back its capital program to make sure they invest within their cash flow. In doing so, they were able to trim off more than a billion dollars from their capital plans for this year alone. Going forward, the company will have the ability to spend more capital as cash flow increases. UPL’s management team has chosen this strategy to keep the business more efficient and cash flow positive. They want to avoid the possibility of any possible cash flow problems going forward and this new strategy will allow for them to stay within their means and only spend what they can afford to.

UPL has robust projections when it comes to future production, as they believe that by 2016 they can grow their production by 42% while their EBITDA will more than double. These conservative projections only assume a minimal rise in natural gas prices, however it’s very likely that the price of natural gas will rise above the $4.50 price that Ultra is modeling it to be by 2016. If this is true and natural gas prices do rise higher, then UPL will easily exceed their projections benefiting the business in many different positive ways. For one, higher natural gas prices will lead to an increase in both total revenue and overall profit for UPL. In turn, this will lead to higher cash flow numbers giving UPL more capital to reinvest back within the business which will only further promote increased growth and production. In turn, all of these added benefits will lead to a stronger long-term outlook for UPL, leading them to beat all future earnings estimates which will only further propel the stock to rise higher and higher.

UPL is already having a strong year in 2013, as share prices are up +28% year-to-date. Going forward, we firmly believe that UPL will be a quick riser and we project shares to be trading at $37 per-share 12 months from now, a total net yield of +63%.

Anadarko Petroleum (NYSE: APC) +33%

imagesAnadarko Petroleum (NYSE: APC) is a large, United States based, crude oil and natural gas exploration and production company. The firm markets, processes, produces, develops, and explores for crude oil, natural gas, and natural gas liquids. Most of Anadarko’s revenues come from onshore United States as well as deep-water operations in Algeria and the Gulf of Mexico. Other deep-water operations include operations along both coasts of Africa, Brazil, China, Indonesia, and New Zealand. Proved oil and gas reserves were 2,560 million barrels of oil equivalent BOE in 2012 with a reserve mix of 46% liquids and 54% natural gas. Last year total production increased 10% and we expect this number to increase going forward as Anadarko plans to spend about $5.5 billion on onshore capital expenditures in the United States in 2013 alone. Due to current low natural gas prices, Anadarko plans to reduce activities at Marcellus and Pinedale/Jonah to free-up resources for more profitable projects.

Last year international production accounted for 27% of total revenues and we expect this number to increase as APC plans to spend $1 billion in capital expenditures on its international operations. In 2012, APC made some significant discoveries of oil in Ghana and natural gas in Mozambique. The natural gas discovery in Mozambique is very large with a base estimated at 35-65 trillion cubic feet equivalent. We think APC is a great value stock especially at its current price. Anadarko is trading at $86.10 per share with a total market cap of more than $43.1 billion. Anadarko has an inexpensive forward earnings multiple of 16.5 times 2013 earnings as well as a PEG ratio of 1.04. APC has strong analyst coverage as well, 90% of the 30 analysts covering the stock have a BUY rating or higher.

APC has the right mix of onshore U.S. developments and foreign exploration projects to continue to thrive and produce great revenue numbers going forward. New discoveries such as the recent APC findings in the Gulf of Mexico and in Mozambique should be very profitable in the long run. Another strength about APC is despite natural gas prices being really low, they have continued to remain profitable despite the fact they are a major natural gas producer. This is why APC will be such a big winner if natural gas prices increase. APC is a great oil play to own and the added benefit of having exposure to natural gas markets is a huge bonus. We believe natural gas prices have bottomed and will inevitably rise. The consensus on Wall Street among analysts is the same. When that does happen, Natural Gas producers like APC will reap large profits. For all these reasons mentioned above, we believe APC is a great BUY opportunity. The current average 12-month price target for APC is $110, we believe in 12-months APC will be trading at $115, a 33% total yield!

Apache (NYSE: APA) +37%

images-1Apache is an oil & gas company operating in several countries including the U.S., Canada, the U.K North Sea, Argentina, Australia, and Egypt. At the end of 2012, it had around 2.85 billion BOE in proved reserves, concentrated in the U.S. and Canada. The proved reserves and the Permian/Central Resources total around 11.7 billion BOE, four times higher than the current proved reserves. The U.S. Permian Basin accounted for around 28% of the company’s total reserves. The company is considered the most active driller in the Permian Basin with around 38 operating rigs.

What makes me interested in Apache is its conservative capital structure. As of March 2013, it had nearly $32 billion in equity, $248 million in cash, and only $11.5 billion in long-term debt. Moreover, Apache is a consistent dividend payer. Its dividend increased from $0.21 per share in 2003 to $0.66 per share in 2012. For the full year 2013, Apache expects to push its costs down, increase its dividend, and restructure its asset portfolio. The company expects to divest $4 billion in assets, and then it would use $2 billion to reduce its debt level and the remaining amount to repurchase 30 million shares. APA currently has a great revenue numbers and management has shown its effectiveness as they have produced great ROE & ROA numbers. Apache is trading at $84.90 per share with a total market of nearly $33.3 billion. The market values Apache at only 9.5 times its forward earnings.

While the markets and competing oil stocks have had a great year so far with S&P up 15%, APA on the other hand has been sluggish appreciating only 8%. Despite this, APA is held by many famous investors, most importantly oil guru, T. Boone Pickens as APA accounts for 9.5% of Pickens portfolio, his second largest position. Compared to peers Anadarko Petroleum (NYSE: APC) and ExxonMobil (NYSE: XOM), Apache is valued the cheapest. As a result, investors should invest in APA due to its lowest earnings valuation, strong balance sheet, and the potential asset sales. If it could divest $4 billion in assets this year, Apache could drive its EPS higher, thanks to the potential share repurchases and debt reduction. Analysts across Wall Street agree that APA is undervalued with an average 12-month price target of $110. We believe Apache will be trading at $117 in 12-months, a yield of 36%. Add on a 0.90% dividend and you have a total yield of 36.90%!

 Eni SpA (NYSE: E) +26% 

AERIO_LOULOUDIEni SpA (NYSE: E), an integrated energy company, engages in the exploration, production, transportation, transformation, and marketing of oil and natural gas. Eni SpA has a market cap of $84.9 billion and is part of the energy industry. Year-to-date E is down 8%, opening up a buy opportunity for many investors. We consider Eni SpA to be a great BUY opportunity. The company’s strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels.

We feel these strengths outweigh the fact that the company shows weak operating cash flow. Revenue growth has been a strength for E as they greatly exceeded the industry average of 6.9%. On top of that, revenues rose by 42.8% over the past year. Growth in the company’s revenue appears to have helped boost the earnings per share. We expect this kind of earnings growth to continue propelling ENI SPA and sending the stock price higher. The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 65.5% when compared to the same quarter one-year prior, rising from $1,972.25 million to $3,264.41 million.

The company has come along ways in a year. Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market’s overall trend during that period and the fact that the company’s earnings growth has been robust. While ENI SPA doesn’t receive much analyst coverage with only 3 analysts covering the stock (1 Strong Buy, 1 Buy, 1 Hold) that doesn’t mean it’s not a great investment opportunity. The fact it is relatively unknown adds to more potential as if they continue to increase earnings year after year they will soon get recognized and soar significantly higher as a result. ENI SPA is also a great dividend play with a dividend yield of 5.20%. Overall, we believe ENI SPA is a great long-term BUY opportunity and have a 12-month price target of $65 per share, a yield of 21%. Add to that a dividend of 5.20% and you have a total yield of 26.20%

  Chevron (NYSE: CVX) +23%

Gas industry, gas transmission systemChevron is the second largest U.S. integrated energy company. For investors who like strong growth, dividend stocks then Chevron is the right pick for you. CVX has been an avid dividend grower for decades, with an average annualized dividend growth of 9.1% over the past five years. Its dividend growth rate over that period was lower than its EPS growth rate, which stood at 13.7%, on average. Among its main competitors, CVX has had the highest rate of dividend growth since 2004. Even though the company is expected to post a paltry EPS CAGR of less than 1% for the next five years on average, its solid cash flow generation will likely support continued dividend increases. Chevron explicitly states that one of its consistent financial priorities is to “maintain and grow dividend.”

CVX has a strong balance sheet, with $17.3 billion in cash and only $12.1 billion in long-term debt. Its long-term debt is only 8.6% of its stockholders’ equity. CVX has the highest profitability per barrel among its peers and the highest cumulative cash flow per share expansion over the past five years. Thus, its case is supported by leading earnings and cash margins, strongest future volume growth among its main peers, and solid shareholder value enhancement potential.

It should be noted that the company is known for its generous share buyback programs – it returned $5 billion in share repurchases last year alone. Chevron is currently covered by 25 analysts, of which 67% hold a BUY rating or higher. We are among the group that believes CVX is a great buy opportunity and we hold a 12-month price target of $145, a yield of 20%. Add to that Chevron’s 3.20% dividend and CVX is set to return a 23.20% annual return.

 Total SA (NASDAQ: TOT) +45%

saupload_oil_stock330Total SA is the main French integrated oil company, operating worldwide and employing more than 95,000 people worldwide. The company deals with all aspects of the oil & gas chain, from exploration to production, refining, transportation and marketing. Total keeps announcing new oil discoveries, a growing production and improving results and dividends. Moreover, the French company’s strategy is now to focus on exploration and invest in riskier/growing sectors such as shale gas in the U.S. or bituminous sand in Canada. Total has been ramping up its efforts to rejoin the big boys of the oil and gas sector. The company has achieved a strong production base in Africa, and for the next three years, it is striving to capitalize in the Middle East as well by building a $1.5 billion condensate refinery in Qatar.

Total SA is currently undergoing several other projects to position itself as one of the most competitive in the industry along with the goal of increasing its profits and market share. These, in turn, will more likely improve the market share of the company and its stock price. The P/E ratio of the company stands at ’10.17’, which shows that the stock price is equally valued. On the other hand, P/B indicates that the stock price is discounted relative to the industry average of ‘2.49’, making it attractive to investors. Price to Earnings per Growth indicates the Total is currently trading at a premium as compared to the industry average. However, it is trading at a discount compared to major players in the industry. Other major reasons to buy Total are, for one they are the leaders in the oil & gas sector and invest massively in exploration. The company just got several licenses in the new potential Artic fields. Total is also investing in the solar and biomass energies, which should drive the revenues at long term. Total’s objective is to invest $22 Billion annually between 2012 and 2014 while selling off $20 Billion of assets by 2014. TOT also offers a great dividend yield of more than 4.5% right now, which has kept growing over the years. Total developed a good payout ratio of 45% in 2011 as well as a strong link with its investors over the years.

Overall we believe TOTAL SA is a great BUY opportunity based on their attractive valuation level as seen in its P/E which is well discounted in comparison to the industry average. On top of that, the company shows outstanding financial performance as seen in its high earnings yield and high revenue growth. The future outlook of the company looks promising as it continuously embarks on several modernization and innovative projects such as the Antwerp refining and Port Arthur shale gas which can boost its profit and position the company as one of the most competitive company in the industry. Our 12-month price target for TOT is $72 per share, a yield of 40%. Add on a 4.5% dividend and you have a total net yield of 44.5%.

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Part II: Top Ten Energy Stocks You Should Own

Part II: Top Ten Energy Stocks You Should Own

How-To-Invest-In-Oil-Stocks-300x299We’re only half-way through 2013 yet energy stocks have already felt the many great benefits of a bullish market with their soaring stock prices. Many of our favorite oil and natural gas stocks have already made substantial double digit gains and we’re not even at the half-way mark of 2013! This surge is one of the main reasons we decided to publish our Two Part Series listing our Top 10 Energy Stocks. It gives us an opportunity to showcase what energy stocks we believe you should be investing in. More importantly, it allows us to tell you why we believe you should invest in these energy stocks. Going forward, we believe American based energy companies are set to produce some of their biggest returns over the next few years as there is a lot of speculation that we are entering an American Energy Boom that will propel these stocks higher.

Last week we released the first Part to our two part article series by showcasing our first Top 5 Energy Stocks. Thanks for waiting everyone and here’s the second part to our series! To read our first article, simply follow the link below:

Part I: Top 10 Energy Stocks You Should Own 

Anadarko Petroleum (NYSE: APC) +33%

imagesAnadarko Petroleum (NYSE: APC) is a large, United States based, crude oil and natural gas exploration and production company. The firm markets, processes, produces, develops, and explores for crude oil, natural gas, and natural gas liquids. Most of Anadarko’s revenues come from onshore United States as well as deep-water operations in Algeria and the Gulf of Mexico. Other deep-water operations include operations along both coasts of Africa, Brazil, China, Indonesia, and New Zealand. Proved oil and gas reserves were 2,560 million barrels of oil equivalent BOE in 2012 with a reserve mix of 46% liquids and 54% natural gas. Last year total production increased 10% and we expect this number to increase going forward as Anadarko plans to spend about $5.5 billion on onshore capital expenditures in the United States in 2013 alone. Due to current low natural gas prices, Anadarko plans to reduce activities at Marcellus and Pinedale/Jonah to free-up resources for more profitable projects.

Last year international production accounted for 27% of total revenues and we expect this number to increase as APC plans to spend $1 billion in capital expenditures on its international operations. In 2012, APC made some significant discoveries of oil in Ghana and natural gas in Mozambique. The natural gas discovery in Mozambique is very large with a base estimated at 35-65 trillion cubic feet equivalent. We think APC is a great value stock especially at its current price. Anadarko is trading at $86.10 per share with a total market cap of more than $43.1 billion. Anadarko has an inexpensive forward earnings multiple of 16.5 times 2013 earnings as well as a PEG ratio of 1.04. APC has strong analyst coverage as well, 90% of the 30 analysts covering the stock have a BUY rating or higher.

APC has the right mix of onshore U.S. developments and foreign exploration projects to continue to thrive and produce great revenue numbers going forward. New discoveries such as the recent APC findings in the Gulf of Mexico and in Mozambique should be very profitable in the long run. Another strength about APC is despite natural gas prices being really low, they have continued to remain profitable despite the fact they are a major natural gas producer. This is why APC will be such a big winner if natural gas prices increase. APC is a great oil play to own and the added benefit of having exposure to natural gas markets is a huge bonus. We believe natural gas prices have bottomed and will inevitably rise. The consensus on Wall Street among analysts is the same. When that does happen, Natural Gas producers like APC will reap large profits. For all these reasons mentioned above, we believe APC is a great BUY opportunity. The current average 12-month price target for APC is $110, we believe in 12-months APC will be trading at $115, a 33% total yield!

Apache (NYSE: APA) +37%

images-1Apache is an oil & gas company operating in several countries including the U.S., Canada, the U.K North Sea, Argentina, Australia, and Egypt. At the end of 2012, it had around 2.85 billion BOE in proved reserves, concentrated in the U.S. and Canada. The proved reserves and the Permian/Central Resources total around 11.7 billion BOE, four times higher than the current proved reserves. The U.S. Permian Basin accounted for around 28% of the company’s total reserves. The company is considered the most active driller in the Permian Basin with around 38 operating rigs.

What makes me interested in Apache is its conservative capital structure. As of March 2013, it had nearly $32 billion in equity, $248 million in cash, and only $11.5 billion in long-term debt. Moreover, Apache is a consistent dividend payer. Its dividend increased from $0.21 per share in 2003 to $0.66 per share in 2012. For the full year 2013, Apache expects to push its costs down, increase its dividend, and restructure its asset portfolio. The company expects to divest $4 billion in assets, and then it would use $2 billion to reduce its debt level and the remaining amount to repurchase 30 million shares. APA currently has a great revenue numbers and management has shown its effectiveness as they have produced great ROE & ROA numbers. Apache is trading at $84.90 per share with a total market of nearly $33.3 billion. The market values Apache at only 9.5 times its forward earnings.

While the markets and competing oil stocks have had a great year so far with S&P up 15%, APA on the other hand has been sluggish appreciating only 8%. Despite this, APA is held by many famous investors, most importantly oil guru, T. Boone Pickens as APA accounts for 9.5% of Pickens portfolio, his second largest position. Compared to peers Anadarko Petroleum (NYSE: APC) and ExxonMobil (NYSE: XOM), Apache is valued the cheapest. As a result, investors should invest in APA due to its lowest earnings valuation, strong balance sheet, and the potential asset sales. If it could divest $4 billion in assets this year, Apache could drive its EPS higher, thanks to the potential share repurchases and debt reduction. Analysts across Wall Street agree that APA is undervalued with an average 12-month price target of $110. We believe Apache will be trading at $117 in 12-months, a yield of 36%. Add on a 0.90% dividend and you have a total yield of 36.90%!

 Eni SpA (NYSE: E) +26% 

AERIO_LOULOUDIEni SpA (NYSE: E), an integrated energy company, engages in the exploration, production, transportation, transformation, and marketing of oil and natural gas. Eni SpA has a market cap of $84.9 billion and is part of the energy industry. Year-to-date E is down 8%, opening up a buy opportunity for many investors. We consider Eni SpA to be a great BUY opportunity. The company’s strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels.

We feel these strengths outweigh the fact that the company shows weak operating cash flow. Revenue growth has been a strength for E as they greatly exceeded the industry average of 6.9%. On top of that, revenues rose by 42.8% over the past year. Growth in the company’s revenue appears to have helped boost the earnings per share. We expect this kind of earnings growth to continue propelling ENI SPA and sending the stock price higher. The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 65.5% when compared to the same quarter one-year prior, rising from $1,972.25 million to $3,264.41 million.

The company has come along ways in a year. Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market’s overall trend during that period and the fact that the company’s earnings growth has been robust. While ENI SPA doesn’t receive much analyst coverage with only 3 analysts covering the stock (1 Strong Buy, 1 Buy, 1 Hold) that doesn’t mean it’s not a great investment opportunity. The fact it is relatively unknown adds to more potential as if they continue to increase earnings year after year they will soon get recognized and soar significantly higher as a result. ENI SPA is also a great dividend play with a dividend yield of 5.20%. Overall, we believe ENI SPA is a great long-term BUY opportunity and have a 12-month price target of $65 per share, a yield of 21%. Add to that a dividend of 5.20% and you have a total yield of 26.20%

  Chevron (NYSE: CVX) +23%

Gas industry, gas transmission systemChevron is the second largest U.S. integrated energy company. For investors who like strong growth, dividend stocks then Chevron is the right pick for you. CVX has been an avid dividend grower for decades, with an average annualized dividend growth of 9.1% over the past five years. Its dividend growth rate over that period was lower than its EPS growth rate, which stood at 13.7%, on average. Among its main competitors, CVX has had the highest rate of dividend growth since 2004. Even though the company is expected to post a paltry EPS CAGR of less than 1% for the next five years on average, its solid cash flow generation will likely support continued dividend increases. Chevron explicitly states that one of its consistent financial priorities is to “maintain and grow dividend.”

CVX has a strong balance sheet, with $17.3 billion in cash and only $12.1 billion in long-term debt. Its long-term debt is only 8.6% of its stockholders’ equity. CVX has the highest profitability per barrel among its peers and the highest cumulative cash flow per share expansion over the past five years. Thus, its case is supported by leading earnings and cash margins, strongest future volume growth among its main peers, and solid shareholder value enhancement potential.

It should be noted that the company is known for its generous share buyback programs – it returned $5 billion in share repurchases last year alone. Chevron is currently covered by 25 analysts, of which 67% hold a BUY rating or higher. We among the group that believes CVX is a great buy opportunity and we hold a 12-month price target of $145, a yield of 20%. Add to that Chevron’s 3.20% dividend and CVX is set to return a 23.20% annual return.

 Total SA (NASDAQ: TOT) +45%

saupload_oil_stock330Total SA is the main French integrated oil company, operating worldwide and employing more than 95,000 people worldwide. The company deals with all aspects of the oil & gas chain, from exploration to production, refining, transportation and marketing. Total keeps announcing new oil discoveries, a growing production and improving results and dividends. Moreover, the French company’s strategy is now to focus on exploration and invest in riskier/growing sectors such as shale gas in the U.S. or bituminous sand in Canada. Total has been ramping up its efforts to rejoin the big boys of the oil and gas sector. The company has achieved a strong production base in Africa, and for the next three years, it is striving to capitalize in the Middle East as well by building a $1.5 billion condensate refinery in Qatar.

Total SA is currently undergoing several other projects to position itself as one of the most competitive in the industry along with the goal of increasing its profits and market share. These, in turn, will more likely improve the market share of the company and its stock price. The P/E ratio of the company stands at ’10.17’, which shows that the stock price is equally valued. On the other hand, P/B indicates that the stock price is discounted relative to the industry average of ‘2.49’, making it attractive to investors. Price to Earnings per Growth indicates the Total is currently trading at a premium as compared to the industry average. However, it is trading at a discount compared to major players in the industry. Other major reasons to buy Total are, for one they are the leaders in the oil & gas sector and invest massively in exploration. The company just got several licenses in the new potential Artic fields. Total is also investing in the solar and biomass energies, which should drive the revenues at long term. Total’s objective is to invest $22 Billion annually between 2012 and 2014 while selling off $20 Billion of assets by 2014. TOT also offers a great dividend yield of more than 4.5% right now, which has kept growing over the years. Total developed a good payout ratio of 45% in 2011 as well as a strong link with its investors over the years.

Overall we believe TOTAL SA is a great BUY opportunity based on their attractive valuation level as seen in its P/E which is well discounted in comparison to the industry average. On top of that, the company shows outstanding financial performance as seen in its high earnings yield and high revenue growth. The future outlook of the company looks promising as it continuously embarks on several modernization and innovative projects such as the Antwerp refining and Port Arthur shale gas which can boost its profit and position the company as one of the most competitive company in the industry. Our 12-month price target for TOT is $72 per share, a yield of 40%. Add on a 4.5% dividend and you have a total net yield of 44.5%.

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Investing in Frontier Markets: Vietnam’s Recent Rally Bodes Well For Long-Term Growth For ETFs

Investing in Frontier Markets: Vietnam’s Recent Rally Bodes Well For Long-Term Growth For ETFs

images-4Stocks on Wall Street readers know that we’ve been bullish on Vietnam. Bloomberg agrees with our outlook. TheBloomberg Markets, November 2012 list of the most promising Frontier markets for investors ranked Vietnam as #1.  United Arab Emirates as #2 – a market we also think has strong growth potential.

It’s no secret that growth in the U.S. and Europe over the next decade will be outpaced by the BRIC’s and emerging markets.  Adventurous investors looking for even more attractive growth potential should also consider Frontier markets.  Frontier markets tend to be smaller than emerging markets.  Shares of frontier companies are also harder to trade than those of emerging countries.

We like Frontier markets that are moving to Emerging Markets.  Developed capital markets are key to becoming an emerging market.  So, we’re most interested in economies where the stock market is developing and companies are beginning to get access to capital.  Also, it’s worth noting that weakness in China tends to get picked up by Frontier Markets.  Sectors that show the most promise in Frontier markets are technology, energy, consumer discretionary and industrials that benefit from infrastructure improvements.

Vietnam fits the bill on all counts.  It has enjoyed a strong and consistent average GDP growth of 7.2% annually since 2000 and projected cumulative GDP growth from 2012-2016 is 31.4%.

The main ETF tracking Vietnam is the Market Vectors Vietnam ETF (VNM) sank 47% in 2011 and was one of the worst performers in the entire emerging world which fell by an average of 21% in 2011.  These horrible losses were largely due to runaway inflation.  The huge drop however opened up a great buying opportunity, as result back in November 2012, we recommended investors to buy shares of VNM as we believed VNM was capable of producing huge gains.

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VNM has performed just how we expected as shares are up +38% over the past 7 months. Investors who have a high-risk tolerance may want to consider making a play on this Vietnam ETF. Make sure to checkout Stocks on Wall Street this week to read our detailed report on Vietnam’s long-term investment outlook.

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Part I: Top Ten Energy Stocks You Should Own

Part I: Top Ten Energy Stocks You Should Own

clean-energy-stock-tradingAcross the board, 2013 has already been a strong year for oil and natural gas companies and we’re only five months into the year! What we have seen is that many of these oil and natural gas stocks have already made double digit gains on the year alone. This is one of the main reasons we have decided to focus this week on getting you invested in the right energy stocks. When it comes to energy stocks, all we have been seeing is huge gains across the board and that’s why we believe this is a great time to invest in the energy sector. More importantly, we believe American based energy companies are set to produce some of the biggest returns over the next few years as there is a lot of speculation that we are entering an American Energy Boom that will propel these stocks higher.

Throughout the week, we are going to be focusing the majority of our articles on the energy sector and the best ways to invest within that sector. The article you are about to read right now is the first part to a two part article series where we will be offering our 10 Favorite Energy Stocks. Below are our first five energy stocks:

Halliburton (NYSE: HAL) Projections: +57.2%

images-3A little over 19 months ago, we first recommended investors to BUY Halliburton as we saw it as a strong long-term investment. During those long 18 months, we unfortunately have nothing to show for it as shares are now trading at the same levels of where they were when we first initially invested. Our timing for HAL was originally wrong as we invested at the wrong moment as shares fell over 40% in the first 9 months due to falling oil prices and overall weakness in our global economy. Since then however, HAL has recovered quite nicely as shares are up +27% over the past 6 months and up +40% over the course of the past year as share prices are now back to where they were when we first initially invested. Fundamentally we still like Halliburton for all the same reasons, read our original article to find out more details.

Halliburton (NYSE: HAL) Poised to Pop: Good Times Ahead 

Going forward, HAL’s outlook is very bullish with 91% of analysts covering HAL issuing a BUY rating or higher. Overall there are 32 analysts currently covering HAL and all but 3 think it’s a great BUY opportunity. If that doesn’t make you feel comfortable then maybe this will, HAL is represented in the equity portfolio of Soros Fund Management who holds a $34 million stake.

2013 has been a good year for HAL investors for several reasons. For one, HAL’s share price has appreciated +18% year-to-date, secondly in February Halliburton announced a +39% increase in its quarterly dividend to $0.125 per share, and finally in its most recent quarter (Q1 2013), the oil and gas E&P play reported a record $7.0 billion. Halliburton’s management has stated that it’s focused on improving North American margins in the intermediate-term and we have no reason to doubt that they won’t accomplish this goal, as historically they have always been one of the most efficient management teams worldwide. If you’re looking from George Soros point of view, he might see HAL as the best way to play America’s energy boom.

Halliburton’s strength in the tight oil and gas space is underrated. Trading at 10.7 times forward earnings, HAL is cheap especially compared to its peers. Going forward we are very optimistic about HAL’s long-term outlook and believe that the company will continue to outperform against their competition and we believe they will position themselves as the leader of the American energy boom. As a result, we believe shares of HAL will be trading at $65 per-share 12-months from now which included with their annual dividend of 1.20% works out to be a total net yield of +57.2%.

Rex Energy (NYSE: REXX) Projections: +21%

oil-stocks330Rex Energy has been a favorite of ours along with being one of our top-performing stock picks for both 2012 and 2013. We first recommended REXX as a strong BUY opportunity around a year ago. In that short time period, shares have soared over +78%. This probably lead to many investors to sell off their whole position thinking that the stock couldn’t rise any higher without however actually reanalyzing the company’s past and future performance, long-term projections, and overall outlook to see if there in fact is more potential still there. We did in fact take the time to reanalyze REXX and what we found was that while it had been a great year there was nothing to suggest that this run would stop or that REXX would lose value going forward. In fact, many key indicators led us to continue to be bullish on REXX. We did however sell half of our position recommending our readers to do the same as in case of a market correction it would protect our portfolio allowing us to play with the houses money rather than still having all our original starting capital at risk. To find out why we like REXX going forward simply click on the LINK below:

After A Successful Rally, Rex Energy Is Ready To Soar Even Higher

Going forward we expect REXX to continue to outperform their peers and have placed a 12-month price target of $20 per share, a total net yield of +21%.

Range Resources (NYSE: RRC) Projections: +27%

Natural-Gas-StationRange Resources stock price has steadily climbed throughout the past year as shares are up +21% year-to-date and +38% over the course of the past 12 months. Going forward, there is nothing to doubt that RRC won’t continue to rise higher as the company foresees production to grow between 20% to 25% over the course of the next few years. RRC’s total resource potential is estimated to be anywhere between 50 to 70 trillion cubic feet equivalent of natural gas. Being a low-cost producer, RRC should yield exceptional profits from these upbeat production numbers.

We also believe that RRC’s new strategy and focus on per-share growth instead of focusing on growth at all costs will be a big driving force for the company going forward and we believe it will be a key factor in sending share prices even higher. With increased production and exports expected to continue to grow there is little to suggest that Range Resource’s stock won’t stop continuing to steadily rise higher. In fact, we think RRC will be a big winner going forward and we expect shares prices to hit $95 over the course of the next 12 months, a total yield of +27%.

Southwestern Energy (NYSE: SWN) Projections: +40%

saupload_oil_stock330Southwestern Energy has made some key recent capital investments that we believe will only further strengthen the company’s long-term outlook as well as sending share prices significantly higher. SWN recently doubled down on its Marcellus acreage, purchasing 162,000 acres from Chesapeake Energy for $93 million. Being the discoverer of the Marcellus play, SWN made the most of its first-mover advantage as they have continued to improve their operations within the acreage. This strategic investment has greatly strengthened SWN’s overall outlook going forward leading to an increase in their overall projections across the board.

Even as SWN expands, the bulk of their assets are still in the Fayetteville Shale. SWN’s strategic capital investments have been crucial providing the company with a low-cost structure that will help SWN profit even if gas prices were to fall or weaken. Shares of SWN rose +37% over the course of the past year, to many investors that is a great return but when you dig deeper and see the long-term potential you realize that SWN is just getting started. The combination of both SWN’s smart and strategic investments along with their luck in what they discovered has led to increased optimism on SWN’s overall long-term outlook. These findings have also led to many analysts across Wall Street upping their projections adding an additional +30% upside to SWN from current levels.  The biggest news of all might be that SWN’s recent acquisitions has led to them becoming a new position in the hedge fund managed by George Soros, the fund disclosed a $16.7 million position in Southwestern Energy.

Following a strong first quarter where SWN posted an annual increase in production of 11% along with earnings of $0.36 per share versus $0.30 EPS just a year ago representing solid growth. Add in the recent developments, acquisitions, and investments and SWN has become a much more interesting play and one that holds a lot more potential and value now going forward. We project shares of SWN to be trading at $52 per-share 12-months from now, a total net yield of +40%.

Ultra Petroleum Corp (NYSE: UPL) Projections: +63%

images-2Just like RRC, Ultra Petroleum is another low-cost producer utilizing a new strategy to increase overall future production. UPL are now using their cost position to focus on profitable growth. UPL has cut back its capital program to make sure they invest within their cash flow. In doing so, they were able to trim off more than a billion dollars from their capital plans for this year alone. Going forward, the company will have the ability to spend more capital as cash flow increases. UPL’s management team has chosen this strategy to keep the business more efficient and cash flow positive. They want to avoid the possibility of any possible cash flow problems going forward and this new strategy will allow for them to stay within their means and only spend what they can afford to.

UPL has robust projections when it comes to future production, as they believe that by 2016 they can grow their production by 42% while their EBITDA will more than double. These conservative projections only assume a minimal rise in natural gas prices, however it’s very likely that the price of natural gas will rise above the $4.50 price that Ultra is modeling it to be by 2016. If this is true and natural gas prices do rise higher, then UPL will easily exceed their projections benefiting the business in many different positive ways. For one, higher natural gas prices will lead to an increase in both total revenue and overall profit for UPL. In turn, this will lead to higher cash flow numbers giving UPL more capital to reinvest back within the business which will only further promote increased growth and production. In turn, all of these added benefits will lead to a stronger long-term outlook for UPL, leading them to beat all future earnings estimates which will only further propel the stock to rise higher and higher.

UPL is already having a strong year in 2013, as share prices are up +28% year-to-date. Going forward, we firmly believe that UPL will be a quick riser and we project shares to be trading at $37 per-share 12 months from now, a total net yield of +63%.

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iShares Turkey ETF Continues to Shine But Is The Rally Sustainable?

iShares Turkey ETF Continues to Shine But Is The Rally Sustainable?

Screen Shot 2013-05-15 at 2.07.06 AMShares of the iShares MSCI Turkey Investable Market Index Fund (NYSE: TUR) has soared throughout 2013 and has even hit its 52-week highs trading at $77.38. Turkey as a whole has been experiencing robust growth as the Borsa Istanbul National 100 has surged to its highest levels in the past 25 years. We have been huge supporters of TUR dating back to August 8th, 2011 when we issued our first ‘BUY’ rating for the ETF in our article ‘iShares Turkey ETF (TUR) Poised for Success‘. Since then, TUR has appreciated +69.67% over the past 22 months.

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What Attracts Investors to TUR

Screen Shot 2013-05-15 at 2.07.34 AMInvestors looking to play the Turkish markets have few options. iShares MSCI Turkey Investable Market ETF (TUR) originally launched in 2008 is the only option available to investors seeking a pure play exposure in the Turkish equity space. TUR is also the only ETF with dedicated Turkish exposure. The banking sector also plays a prominent role in the investable market in Turkey and TUR has a high concentration of financials in its portfolio.

What To Expect Going Forward

When it comes to Turkey, it has been the talk of a higher sovereign debt rating that has been lifting TUR, the lone ETF devoted exclusively to the country. Turkey, which has been engaged in a multi-decade conflict with Kurdish militants in the Southeast part of the country, is working to end the conflict. The government there is in negotiations with Abdullah Ocalan, the jailed leader of the Kurdistan Workers’ Party or PKK, in a bid to end the bloodshed.

Just last month, Moody’s Investors reported that Turkey’s ongoing efforts to bring an end to the conflict could be a positive credit step. Fitch Ratings upgraded Turkey’s long-term foreign currency Issuer Default Rating (IDR) to BBB- from BB+ back in November and the Long-term local currency IDR to BBB from BB, this is huge news as it’s giving Turkey its first investment grade ratings in nearly two DECADES.

Screen Shot 2013-05-15 at 2.06.53 AMThis has been great news for investors as the speculation of a possible credit rating upgrade has lifted Turkish banks shares. TUR is heavily centered on the Turkish financial sector with 51.9% of its holdings in financial services stocks, quadruple its next largest sector weight, industrials.

Turkish Outlook

Turkey’s economy has some good signs heading their way. Beyond this falling inflation rate, investors should note that Turkey has seen a plunging growth rate as well.

Turkey has good medium-term growth prospects and a diverse economy. The nation’s debt-to-GDP ratio stands at 39.9%, much lower than the debt-to-GDP ratio of many developed economies. On top of this, the country has a low employment rate, government reforms, strong, solid banking system, and improved credit rating. Adding all these solid growth factors together and Turkey could prove to be a great investment market in Europe for years to come.

If you have any further questions on either TUR, Turkey’s economy or any investment at all don’t hesitatet to contact us at all by emailing us at jameshartje@StocksonWallStreet.com or Follow our Contact Form

Also make sure to tune in later this week for our long-term outlook on TUR along with more detailed analysis on both Turkey and other emerging markets.

How Three Small to Mid-Cap Chinese Tech Stocks Outperformed Three Large Cap Chinese Tech Giants?

How Three Small to Mid-Cap Chinese Tech Stocks Outperformed Three Large Cap Chinese Tech Giants?

If you were able to flip a switch & go back a year ago today you know what you would have?  A lot of big questions marks & some major unknowns about what to expect from Stocks on Wall Street most recent investment advice. On April 30th, 2012 to a lot of people’s surprise, Stocks on Wall Street published an article titled:

Three Small to Mid-Cap Chinese Tech Stocks Worth Watching!

Screen Shot 2013-04-30 at 3.49.43 AMThe title is rather self-explanatory but just to make sure it’s clear to everyone we recommended our readers to invest in three relatively unknown, highly speculative small to mid cap Chinese tech stocks.

When we originally made these picks it was an interesting time to be involved in the technology sector.  Mark Zuckenburg has just taken Facebook public and thanks to the IPO heard around the world, many analysts and investors alike focused their full attention on Facebook’s IPO not recognizing that there was plenty of better investment opportunities out there, they just needed to be found. At the time, analysts were raving about America’s growing tech boom and all the different strong technology giants we had in the U.S. The thing was, many of these U.S. tech giants had done nothing to prove themselves and really it was the media blowing everything out of proportion most infamously the whole Facebook IPO and it’s 24/7 news coverage. When you looked at the facts, it was really China with the upper hand and the one in the driver seat. With a population of over 1.4 billion and a booming tech industry it was really China who had emerged as the true player in the tech world holding many of the top up and coming tech stocks. At the time our favorite Chinese tech stock was Tencent Holdings who is the equivalent of Facebook to China. All you need to do is put both Tencent Holdings (0700.HK) and Facebook’s (FB) charts next to each other to see which company was leading the way. At the time, we had already been current Tencent shareholders leading even more to our reasoning of finding a completely new investment route than we are use to.

Screen Shot 2013-04-30 at 3.49.07 AMInstead of choosing to invest in what many considered to be China’s three can’t miss, large-cap tech stocks. They are as follows, Baidu (NASDAQ: BIDU), China Mobile (NYSE: CHL), & Sina Corporation (NASDAQ: SINA). We on the other hand decided to take the road less traveled and in this case steep.

Collectively we decided we would target three small to mid-cap Chinese tech stocks. The highly speculative nature of the picks was something that intrigued us quite a bit. While these stocks were relatively unknown to the average investor they weren’t to us. Like when making all our investment decisions, we made sure we new the inside and outs of all three picks and while they had some relatively high risks to them we believe the potential gains made them worth the risk. As a result, we invested in the following three Chinese tech stocks and for those of you who have read our original article you would know that we did outline the speculative nature of these picks just so our readers new that they weren’t your typical, conservative investment opportunity. The three stocks we invested in were the following:

  1. RDA Microelectronics (NASDAQ: RDA)
  2. Spreadtrum Communications (NASDAQ: SPRD)
  3. Vimicro International (NASDAQ: VIMC)

Screen Shot 2013-04-30 at 3.49.20 AMLet a year quickly fly by & that’s how you get to where we are today. Did we make the right decision? Should we have gone with the Chinese Large Cap Options Instead?

Hands down we had made the right decision & no we were lucky we avoided investing in any of the Large Cap Chinese Stock Picks. Instead going the route of our three speculative Chinese tech plays ended up being the right call.  You can overlook these things in every possible nature but overall our decision paid off big-time especially when you factor in how our three Large Cap counterparts performed during that same time period.

If we had gone with our large cap tech strategy we would have held positions in the following:

  1. Baidu (NASDAQ: BIDU)
  2. China Mobile (NYSE: CHL)
  3. Sina Corporation (NASDAQ: SINA)

Over the past year, all three stocks performed well below their expectations producing negative overall yields across the board.

  1. Baidu (NASDAQ: BIDU) -36%
  2. China Mobile (NYSE: CHL) -2%
  3. Sina Corporation (NASDAQ: SINA) -6%

Screen Shot 2013-04-30 at 3.49.29 AMTogether the three stocks resulted in a total loss of -44%. If you average that out over the three different picks you’d get -14.66% each.

How happy do you think our readers would have been if all we had to show them was a total net loss of -44%? Not happy one bit, we can tell you that.

Luckily, we chose the alternative route & as a result we believe our readers will be extremely pleased with our overall performance. Over the past year, all three stocks have taken virtually a different route than planned but the good part is RDA was the only pick that failed to produce any substantial gains. That’s right, RDA really struggled last year & heading into 2013 with the overall share price falling -28%. The good news is that SPRD decided to have an exceptional year grossing +57%, which will put us comfortably back in the lead. Finally, last but not least we have VIMC who performed steady & strong all year long grossing a total of +17%.

1.     RDA Microelectronics (NASDAQ: RDA) -28%

2.     Spreadtrum Communications (NASDAQ: SPRD) +57%

3.     Vimicro International (NASDAQ: VIMC) +17%

Screen Shot 2013-04-30 at 3.55.02 AMTogether the three stocks resulted in a total gain of +46%. If you average that out over the three picks you’d get +15.33% each.

As you can see, it was quite a different tale of the two story lines.

A large part of our success comes directly thanks to the exceptional year that SPRD had appreciating over +57%.

You can’t let VIMC’s performance & achievements go unrecognized, as +17% is still a great one-year yield.

As for RDA, there’s not much we can say other than it just wasn’t their year. If anything, they were lucky they got to team up with such a dynamic duo as RDA’s -28% would them only behind BIDU as the worst pick of the group.

Not quite done just yet, there is one last thing we’d still like to analyze. Lets see how our 12-month price targets matched up with each picks actual total net gains.

To start we have VIMC who we originally bought at $1.28 per share. While VIMC had a solid year appreciating +17%, it didn’t come close to our 12-month price target as we set the bar ridiculously high with a price of $2 per share. This would have resulted in a total yield of 56%. C’mon now they’re not SPRD lol!

Screen Shot 2013-04-30 at 3.57.03 AMAs for SPRD, they were another pick where we set the bar ridiculously high. We bought our original shares at $13.80 so issuing them a 12-month price target of $21 per share is a tough feat as that’s a total yield of 52%. We sure hope you all remember just how great SPRD performed & the yield they brought in this year as even though we set the bar high, they still beat it by a cool +5%.

Last but not least we have RDA holding up the bottom at -28%. When we first invested in RDA it was trading at $12.87. Originally we had anticipated RDA would at least be trading in the positive territory throughout 2012 & 2013 so we set a modest 12-month price target of $14.50 resulting in a total yield of 12.66%. Sadly even with the modest expectations it just wasn’t RDA’s year at all, lets just hope they come back next year stronger than ever.

To some people the RDA pick will bother them as they have a tough time accepting defeat especially if that was your decision making that let to the defeat. But since all three picks were made collectively together it’s in our best interest to put RDA behind us & focus in on the all the good things that came of today. It’s all about looking at the big picture & seeing that there is nothing worth complaining about as in fact we should be quite satisfied with ourselves & equally impressed as producing a total net yield of +46% is a great achievement. It stands even more impressive when you factor in just how bad the Chinese large cap tech stocks performed. If there is one thing you can still easily see is that our economy is still struggling worldwide & that we are still a ways away from times of economic prosperity. These aren’t your fathers boom years where whatever you put your money into in the markets it just went up. You try that kind of strategy now a days & you’ll be quickly asking where’d your money go. It clearly takes a strategic investment mind & someone with in-depth knowledge about the markets & what they’re doing to produce consistent gains trade after trade.

Screen Shot 2013-04-30 at 3.56.47 AMA comparison we always like to make is to see how both the NASDAQ & Dow Jones Industrial Average have been performing during the same time period. Over the past year it was actually the NASDAQ who slightly edged out the Dow Jones appreciating +14% compared to +12.15%. That’s where I like to factor in our average yield per pick which was +15.33% & you can see that even with RDA’s struggles we were able to beat the markets & that we made the right overall decision in investing our money. Now the next question is where to next?

Everyone make sure to tune in later this week for more in-depth analysis on all three of our picks. Stocks on Wall Street will be reassessing our overall position on each of them, offering new analysis & guidance going forward, we will be again handing out our 12-month price targets along with offering our final overall decision on whether we are going to hold onto any of the three stock picks or whether we decide to take our gains & relocate somewhere else to find the next great investment opportunity.

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After A Successful Rally, Rex Energy Is Ready To Soar Even Higher

After A Successful Rally, Rex Energy Is Ready To Soar Even Higher

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Back on July 2nd, Stocks on Wall Street released an article on Rex Energy (NASDAQ: REXX) recommending the stock as a ‘BUY’ and signaling to investors to purchase shares at the price of $11.62. Due to overall strong performance and increased optimism around both Rex Energy and the growing region they drill in we decided to upgrade our position and offer some new changes and updated guidance on Rex.

How Has Rex Energy Actually Performed?

Since our recommendation REXX has performed exceptionally well soaring over 39% in a 9-month period all the way to $16.11. At its peak, shares hit $17.33 a total yield of well over 50%. After further examining REXX’s financial statements we are still optimistic especially since overall numbers have improved, better positioning the company for the long-run. Below are some five reasons to continue to be bullish on Rex.

Five Reasons to Continue to Be Bullish on Rex Energy

  1. REXX’s PEG Ratio improved substantially rising from 0.96 back in July 2012 to currently 0.51. This is direct proof that management’s overall strategy and efficiency have been very effective positioning the company for a strong year going forward.
  2. The company has beat earnings estimates the last two quarters and as a result consensus earnings estimates for 2013 and 2014 have increased.
  3. Three initial test results from the Utica prove to be hugely successful and big wins for Rex indicating the liquid-rich area is even more prosperous than they originally projected.
  4. As a result of all the positive feedback, strong numbers, & overall consistent performance analysts across the board have raised their price target for REXX from $16 to well over $19 a share while continuing to maintain an ‘Outperform” rating on the stock. Overall 82% of the analysts watching the stock have issued a ‘BUY’ rating or higher.
  5. Like we have mentioned before REXX continues to be a logical acquisition candidate for a bigger player. Why? It’s due to the fact that REXX is a small cap company worth a little over $1B however their robust production, growth and valuable set of assets make them a very desirable company in the eyes of the big players.

What Risk Factors to Account For

g289363ex99_2s1gbgdREXX is not immune to everything and if there is a weakness it’s the concern in their liquidity going forward especially if gas prices were to fall much lower.  Investors shouldn’t be all to concerned however as we continue to see management effectively combatting this issue and in the past they have always found ways to keep production fully up and running so we have no reason to doubt that they would stop such efficient business practices now. In addition, Rex still has various assets for sale, which have helped provide a safety net if liquidity issues were to ever arises. After examining the books, it looks like REXX is in a much better financial situation now then it was just 9-months ago which is a good indicator going forward. When we first recommend Rex, the company had about three years of liquidity before they would have had to start cutting back on their drilling program or finding other sources of cash. Today’s current rate shows Rex has well over four years worth of liquidity, an optimistic sign for investors and further proof of management’s effectiveness.

Increased Spending Followed By Increased Expectations

mc_080207aGoing forward expect Rex to continue to perform exceptionally well as they increase the amount of capital they’re spending on production, which in return should deliver much higher revenue numbers. When talking about the successful recent tests and the future potential in the region Rex’s CEO, Tom Stabley, said, “that the company believes the past results demonstrate the huge opportunity that exists for continued superior well performance in this region going forward.” Stabley used these tests as a key reasoning behind the company’s huge capital spending program. Rex isn’t the only one increasing their spending either as both Gulfport and Magnum Hunter Resources are following suit and spending a large portion of their 2013 capital budget on the play. With such a huge increase in capital spending, expectations are very high, as hopefully the move will prove it’s worth generating significant liquids-rich growth for all three companies.

Overall Long-Term Outlook

Overall, we continue to be very Bullish about Rex Energy anticipating huge liquids growth production coming from the Utica shale. As a result we expect REXX shares to continue to outperform their peers and as a result we are raising our original 12-month price target from $18.50 to $20 per share, a total net yield of 72% on the year and an additional 32% from the current stock price.

CLICK HERE TO READ THE ORIGINAL ARTICLE ON REX ENERGY

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A Perfect Storm Brewing for Copper Mining Stocks?

A Perfect Storm Brewing for Copper Mining Stocks?

Screen Shot 2013-02-22 at 1.05.08 AMCopper Predicted to Rebound in 2013  

Although copper prices hit a one-month low this week, we believe the broader global trend bodes well for copper prices to rebound through the remainder of 2013.  The convergence of emerging market demand, a global boom in infrastructure development and a constraint on new supplies of copper will pus copper prices higher.

Prices will be influenced by demand from China and emerging markets, economic activity in the U.S. and other industrialized countries and especially a renewed international and U.S. push to rebuild global infrastructure.

Limited New Supplies of Copper  

A major factor will be the timing of new supplies of copper and production levels of mines and copper smelters.  Companies that have a high leverage to copper prices will benefit immensely from the potential demand for the metal in the developing markets.  We believe that a slowdown in developing new copper supplies presents a major investment opportunity.  Copper mining stocks that are well positioned to capitalize on this slowdown and poised to quickly develop new supplies of copper supplies represent a significant investment opportunity.

Temporary Weakness, but Strong Outlook.  

Weaker-than-expected U.S. housing construction data and worries about China’s real estate market fueled concerns about future demand for copper.  China accounts for 40% of global copper usage.  And real estate construction is a major drive of copper demand.  This week’s $3.63 per pound price on the Comex division of the New York Mercantile Exchange is the lowest traded price since Jan. 17.

Traders still see positive signs in the U.S. housing report, however.  Compared with a year ago, new U.S. home sales were up 23.6%.  Investors follow construction data closely for clues about future demand for copper.  Analysts at Goldman Sachs said in a report, “The ongoing structural recovery in U.S. housing activity is set to be an important contributor to global copper demand growth (as well as market sentiment) in 2013, and should be a bullish drive of copper prices.”  Goldman reiterated its forecast for copper prices to reach $4.08 per pound within the next six months.

Talk that China might introduce new restrictions for its property market also drove copper prices lower.  Some local Chinese governments set limits on mortgage lending to dampen speculation as property prices in major Chinese cities rose for the first time since 2011.

Copper Prices Correlate Strongly to Economic Outlooks  

Copper ranks third after iron and aluminum in terms of consumption of industrial metals.  It is particularly important for infrastructure development.  Construction comprises the single largest market for copper, followed by electronics, transportation, industrial machinery and consumer products.  We witnessed record high prices for copper from 2006 to 2008 as growing demand from emerging economies and, in particular, China powered a surge in prices and very low inventory levels.  Then prices dipped in December 2007 to a low of $1.26 per pound due to the U.S. financial market crisis, concerns about the global economy and reduced consumption.  However, Copper prices bounced back to an average of $4.00 per pound in 2011 and averaged $3.61 per pound in 2012 – a drop of 10% from 2011.  This drop reflected concerns about China’s slowdown, the European sovereign debt crisis and a sluggish U.S. economy.

The drop in price has hurt the results of major copper producers like Freeport-McMoRan Copper & Gold (NYSE:FCX), Southern Copper (NYSE:SCCO) and Newmont Mining (NYSE:NEM) – all of which suffered in 2012.

Long-term Bullish View on Copper

Nevertheless, in spite of its volatility, we have a long-term bullish view on copper.  Our perspective is supported by copper’s widespread use in construction, limited supplies from existing mines and especially the absence of major new development projects.

Zack’s Industry Outlook (Feb. 14, 2013) stated that all signs point to a recovery in copper prices driven, in part, by accelerated production among Chinese manufacturers.  Morgan Stanley predicts copper prices will rise 7.6% in 2013 to $3.88 per pound or $8,554 per metric ton (MT), up from $7,952 in 2012.  HSBC’s chief economist, Hongbin Qu, said last week that, “Despite the still tepid external demand, the domestic-driven restocking process is likely to add steam to China’s ongoing recovery in the coming months.”  And Bloomberg reported that the forecast for rising copper prices is based on anticipated demand increases from China, the U.S. and even Europe.

Global Infrastructure Investments will drive Copper Higher  

The push to expand global infrastructure is a key indicator in our belief that copper prices will continue to push higher through the remainder of 2013.  Consider these key indicators driving global infrastructure investments:

Emerging Markets.  Growth in the emerging markets, particularly China and India, was a major driver of copper demand over the last few years. However, of late, demand in China has slowed down. China’s recent $150 billion infrastructure stimulus has helped improve the sentiment somewhat and holds promise for the metals and mining industry going forward, as we note below.  This global economic slowdown is the biggest headwind for the metals space overall at present.  Nevertheless, the long-term picture remains a lot more promising as the emerging market economies are expected to get back in shape with the help of expected fiscal and monetary stimuli.

Screen Shot 2013-02-22 at 1.05.38 AM

China’s Infrastructure Expansion.  China’s economy is beginning to rebound even though the pace of the recovery will be slower than previous periods.  China’s new leadership recently announced fresh stimulus measures that will likely bolster demand for copper. Although Chinese exports remain weak, the good news is that home prices and homes sales in China are rebounding.  The new Chinese leadership has reiterated its support for a conventional mix of proactive fiscal policy and many analysts believe they will be successful in boosting growth from +7.8% in 2012 to +8.0% in 2013 and +8.3% in 2014.  The implication for the construction market is that growth will continue.  The stabilization in investment since mid-2012 has prevented China’s slip toward a feared hard landing, supported by a V-shaped recovery in infrastructure, which hit a trough with a -4% contraction in the first two months of 2012, but is now increasing by nearly +15% year-on-year.

The main construction driver in China will continue to be infrastructure.  Although the heyday of growth for China’s construction market may be over, the sheer size of the market will keep it among the most attractive in the world for the foreseeable future.  China’s new leaders are pushing a new type of urbanization that has major implications for the construction sector and, in turn, for copper prices.  In particular, their “intelligent city drive” which relies on modern information technologies such as telecommunications and cloud computing, will involved the building of intelligent systems serving a wide range of sectors from public security, healthcare, transportation and the power grid.

Group 20 Global Infrastructure Push.  A hot topic this week in Moscow at the The Group of 20 agenda is an issue that has long affect emerging markets’ economic growth plans:  weak infrastructure.  India has called for better infrastructure funding.  Russia has made investment financing a priority on how to kick-start global growth.  In emerging Asia, much-needed infrastructure projects fall through as a result of funding problems. The World Bank estimates that countries in the East Asia Pacific region need $400 billion of investment in infrastructure annually, while South Asia needs around $200 billion.  Infrastructure spending will remain a key issue throughout 2013.  This focus on construction will only serve to drive global demand for co copper.

Obama’s “Fix it First” Policy.  President Obama’s recent State of the Union plan to repair the nation’s ailing infrastructure should not be overlooked.  His “fix it first” policy calls for investing $50 billion in transportation infrastructure.  Obama also called for the creation of a National Infrastructure Bank to bring public and private financing together to plan projects.  Coupled with the U.S. housing recovery we touched on earlier, we believe the U.S. will certainly contribute to what we believe will be a growing demand for copper in 2013.

Bottom Line:  The bottom line here is that the global push to rebuild infrastructure will almost certainly create a knock-on effect that will drive the prices of industrial metals higher.  Copper promises to be at the forefront of that trend.

Supply Constraints will Drive Demand Higher.  

Copper prices will be heavily influenced by the timing of new supplies of copper and the production levels of mines and copper smelters.  Companies that have a high leverage to copper prices will benefit immensely from the potential demand for the metal in the developing markets.  Cost inflation in the sector is also expected to be a headwind for metal and mining companies over the next several years, driven by a number of factors such as labor, energy, ore grades, currencies, supply constraints and taxes.  Plus, global economic uncertainties, softening commodity prices and higher input costs are increasing the pressure on company margins.

To counter all this, mining and metals companies must constantly review their portfolios to identify underperforming assets and shut down or divest high cost and non-core assets.  Industry consolidation, automation technology, owner-operated mines and investment in energy assets are some of the steps that companies can take to offset to the impact of rising costs.

Production drops for World’s Largest Copper Company.  

Expanding copper mining production continues to be a challenge for Chile’s Codelco, the largest copper producing company in the world.  Codelco (the National Copper Corporation of Chile) is the Chilean state-owned copper mining company, formed in 1976 from the foreign-owned copper companies that were nationalized in 1971.  Codelco produced 1.66 million tons in 2007 – 11% of the world total.  It controls about 20% the total global copper reserves.  They recently reported that their own production dropped in 2012 to the lowest level in four years.  And figures from the last monthly newsletter issued by Cochilco (Chilean Copper Commission) show that the state-owned copper company produced a 5.1% less copper in 2012 if compared against 2011.  According to CEO, Thomas Keller, Codelco’s 2012 production was down primarily due to “dwindling ore grades” in all its deposits.  BHP executive, Peter Beaven, recently told an industry gathering in Santiago, “Mining in Chile is at a turning point as the industry requires large expenditures just to maintain throughput.”

Copper miners across the globe continue to expand production.  Grupo Mexico (OTC Pink: GMBXF) plans to spend $2 billion on its mining division this year, a portion of which will go towards the company’s Buenavista mine in Northern Mexico.  The company wants to produce 1.4 million metric tons of copper per year by 2015, Reuters reported.  BHP Billiton (NYSE:BHP) expects its copper production to increase in 2013 and 2014 by a 10% compound annual rate, largely driven by its Escondida mine in Chile, which is on track to increase its production by 20%.

10 Biggest Copper-Producing Countries

Country

2010 Production

(000 metric tons)

1.  Chile 5,427
2.  China 1,247
3.  Peru 1,246
4.  U.S. 1,136
5.  Australia 873
6.  Indonesia 872
7.  Zambia 808
8.  Russia 622
9.  Canada 478
10. Kazakhstan 434
Source: CRU

10 Biggest Copper Producers

Company

2010 Production

(000 metric tons)

1.  Codelco (Chile) 1,757
2.  Freeport-McMorRan (USA) 1,441
3.  BHP Billiton (Australia) 1,135
4.  Xstrata (Switzerland) 907
5.  Rio Tinto (UK/Australia) 701
6.  Anglo American (UK) 645
7.  Grupo Mexico (Mexico) 598
8.  Glencore Intl. (Switzerland) 542
9.  Southern Copper (USA) 487
10. KGHM Polska (Poland) 426
Source: CRU

images-1Freeport-McMoRan’s (NYSE: FCX) fourth-quarter net income rose 16%, to $743 million, as sales in the previous year were depressed by labor disruptions in Indonesia.  The company aims to grow its annual copper production to over 5 billion pounds per year in 2015 from 3.66 billion pounds in 2012, and expects its $20-billion acquisition of Plains Exploration & Production (NYSE:PXP) and McMoRan Exploration (NYSE:MMR) to close in the second quarter of this year.  Union workers at two of Southern Copper’s (NYSE:SCCO) properties in Peru may go on strike if they don’t reach an agreement with the company within 15 days, Fox Business reported, citing a union leader.

Back to copper, the metal is essential for modern living. It delivers electricity and clean water into our homes and cities and makes an important contribution to sustainable development. More than that, it is essential for life itself. Copper is interwoven with the story of humanity’s progress. It has crucial role in our homes, in transportation, as well as in infrastructure and in our industries is omnipresent.

Economically, copper consumption is closely associated with industrial production, and therefore, tends to follow economic cycles. During an expansion, demand for copper tends to increase, thereby driving up the price. As a result, copper prices are volatile and cyclical. Swingplane Ventures has seen some analysts pick up as one research firm just issued a $10 target price on Swingplane Ventures. The firm said that a due diligence property evaluation suggests there is a significant opportunity to further develop the mineral potential of the property and dramatically increase the current level of production. The company intends to evaluate potential to: 1) increase the current level of production and 2) undertake construction of a processing facility to maximize recovery of economic grades of copper concentrate.

imagesNotably, in early January, First Quantum Minerals, a $9 billion mining company, made an offer of $5.1 billion to purchase Inmet Mining which holds a very coveted copper mine in Panama. Inmet Mining, a company with a prized copper mine has almost doubled in market valuation this past year alone. Swingplane Ventures operates in the copper market in Chile, located in South America. This part of the world has been proven to possess extremely profitable copper mines as seen by First Quantum’s offer for Inmet. After further due diligence and research, we are upgrading the stock to $11.50 with a possibly buyout looming.

There have been some worries surrounding copper because of the short-term macroeconomic concerns regarding the US and Europe. However, the fundamentals are still excellent for copper: as Asia represents over 60% of world demand with China by itself at 39% and could reach 45% in 5 years. Southern Copper forecasts that China and Emerging Markets countries will continue growing, albeit at a lesser pace, but still showing substantial gains. The company also notes that limited production upside and falling grades will result in a deficit copper market going forward.

Now, we take a closer look into a recent news item for the metal signifying of some larger trends. The fundamentals for copper are clearly improving as the world’s copper usage and demand for copper is picking up. Friday, was a prime example of that as copper futures rose the most in a week as China’s trade expanded more than forecast, and car sales jumped to a record in the Asian nation, the world’s biggest consumer of industrial metals. In January, exports from China surged 25% and imports climbed 29% from a year earlier, both topping projections by economists in Bloomberg surveys, government data showed today. Sales of passenger vehicles surged 49%, a state-backed trade group said. A 6 month price chart of copper follows.

Knowing that we are not the only ones bullish on the metal has given us more confidence in our own thesis. This fact was demonstrated this week when Kevin Puil, the Malcolm Gissen & Associates portfolio manager, went through his bullish thesis on Seeking Alpha. Puil said “The fundamentals for copper remain highly favorable and I continue to see secular demand for most commodities, copper in particular. Industrialization and urbanization, especially in the BRIC [Brazil, Russia, India, China] countries, is not about to stop, and this continues to put pressure on copper miners, who struggle to keep up with demand. Supply growth has slowed due to lower grades, higher costs and political unrest. In addition, the new projects and mine expansions that were scheduled to come on-line haven’t materialized, and if they do, it will not be in a timely fashion. Quite frankly, I think you could see copper peak above $4 a pound [$4/lb] this year…”

The decline in output that Puil discussed is already being seen in the financial markets as Teck Resources (TCK), Canada’s largest diversified miner, may consider acquisitions in copper mining to help offset an expected decline in the company’s output of the metal.

(HBM) is a Canadian integrated mining company with operations, development properties and exploration activities across the Americas principally focused on the discovery, reduction and marketing of base and precious metals. The company’s objective is to create sustainable value through increased commodity exposure on a per share basis by growing long-life deposits in high-quality and mining-friendly jurisdictions. HudBay is a strong stock with great analyst coverage. Of the five analysts currently covering HBM, all five have buy ratings or higher.

Southern Copper (SCCO) is one of the largest integrated copper producers in the world, and has the largest copper reserves of the industry. The company produces copper, molybdenum, zinc, lead, coal and silver. SCCO is 81.3% owned by Grupo Mexico, a Mexican company listed on the Mexican Stock Exchange. The remaining 18.7% ownership interest is held by the international investment community. All of its mining, smelting and refining facilities are located in Peru and Mexico, and the company conducts exploration activities in those countries and Chile. Southern Copper has performed quite well recently with shares soaring more than 23% over the course of the past three months.

China’s Jiangxi Copper (SSE:600362) and Japan’s Pan Pacific Copper said mining companies will pay “at least 10% more in fees” to process copper this year, China Daily reported.  And Chinese mining companies have invested more than $1 billion in copper.  Newmont Mining (NYSE:NEM) expects gold and copper production in 2013 of approximately 4.8 million to 5.1 million ounces and between 150 and 170 million pounds, respectively. The company plans to spend up to $2.3 billion on various projects this year.  Sierra Metals (TSXV:SMT) announced that in 2012 its copper production rose 51%, to 15.9 million pounds, from the year before.  For 2013, it expects copper production of up to 23.1 million pounds.

Bullish Stance on Copper

Notwithstanding the current volatility in prices, we have a long-term bullish stance on copper, supported by its widespread use, limited supplies from existing mines and the absence of significant new development projects. Prices will be influenced by demand from China and emerging markets, economic activity in the U.S. and other industrialized countries, the timing of new supplies of copper and production levels of mines and copper smelters.  Companies that have a high leverage to copper prices will benefit immensely from the potential demand for the metal in the developing markets.

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Two Undervalued Deep-Water Drilling Plays: GulfMark & Transocean

Two Undervalued Deep-Water Drilling Plays: GulfMark & Transocean

images-1If you’re looking for strong, compelling investment opportunities then look no further than the oil and natural gas sector. We believe oil and natural gas are long-term winners as they’re finite resources that will serve a vital role in our global economy for many years to come. The industry as a whole is primed for an uptick. In fact, the industry anticipates spending close to half a trillion dollars on exploration and production in the coming year. With the world’s largest companies like Chevron and ExxonMobil leading the way, it’s hard to believe that this is just a hunch.

As the BP Oil Spill is finally becoming a thing of the past, we are starting to see a huge shift from the cautious spending we have seen the past few years. With oil and natural gas prices expected to be at least sustainable if not substantially increase, expect the industry as a whole to continue to profit especially Deep-water drilling plays. Below we have two great Deep-water drilling stocks that you should invest in:

GulfMark Offshore (NYSE: GLF)

images-2GulfMark Offshore provides offshore marine services throughout the world to companies involved in the exploration and production of oil and natural gas. We believe GLF is a strong buy opportunity for several reasons. To start, GLF has one of the youngest fleets in the industry and has seen recent drilling success in areas like East Africa. On top of that we’ve seen increased activity in other areas like the Black Sea and Falklands giving the company reason for optimism. 14% of GLF’s shares are currently owned by insiders, an optimistic indictor especially as GLF executives are required to hold shares giving them further incentives to contribute to GLF’s future success.

In recent months, GLF has gone relatively unnoticed due to the lingering effects from BP’s Deep-water oil spill. However, we believe we are finally turning a page on that incident. Analysts are finally Bullish on GLF as 85% of the 13 analysts covering the stock rate it as a BUY or higher. GLF has shown us the ability to make money, producing solid profit margins and total revenues for several consecutive months now. Going forward expect GLF’s capital expenditures to drop significantly, giving the company a nice boost in cash flows. The stock currently trades around 0.9 times its book value, below its 10-year average of 1.7 making it a more enticing play. Like we stated earlier, we believe oil and natural gas are long-term winners and GLF is a direct pay on that outlook.

Our 12-month price target is $50, which would result in a total-yield of 35% add on a 2.70% dividend and you have a total net yield of 37.70%.

Transocean (NYSE: RIG)

imagesTransocean is now notorious for being known as the company that operated the fateful Deep water Horizon drilling rig for BP. Investors who know the company; realize that it’s much more than that.  Transocean is the world’s largest offshore drilling contractor with 140 rigs operating around the world. Locations include Africa, the North Sea, South America, Southeast Asia, and of course the Gulf.

RIG contracts the operation of these rigs to oil companies like BP, ExxonMobil, and Anadarko. These companies pay Transocean a day rate ranging from $50,000 to $650,000 per day, depending on the type of rig. Ultra-deep water rigs, ones that drill up to 40,000 feet in water, command the most, while standard jackups command the least.

We believe Transocean is a strong investment and a compelling play as the market has unfairly set some really low expectations for the stock.  Despite the horrific incident in the Gulf, global oil demand is not declining. As a result, RIG will continue to play a leading role in extracting oil worldwide.

RIG has a solid book of business overall. We like their 0.67 PEG Ratio, $10 billion in revenues, and the 6 billion in cash on the books. Analysts are also finally becoming bullish on Transocean as 71% of the 41 analysts currently covering the stock hold a BUY rating or higher.

Overall we believe RIG is a compelling undervalued play and an investment opportunity you should take advantage of. Our 12-month price target is $75, which would result in a total-yield of 31%.

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Is Gold a Good Investment or Just a Waste of Time?

Is Gold a Good Investment or Just a Waste of Time?

Gold is an commodity that’s often talked about, is it still a good trade? See what Visual Economics thinks in the single biggest gold infographic you will see:

 

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Macau’s Casino Revenues Soar in 2012: Expect Even Larger Gains to Come From Both LVS & MGM

Macau’s Casino Revenues Soar in 2012: Expect Even Larger Gains to Come From Both LVS & MGM

chipsCasino revenue in Macau grew 13.5% last year to a record $38 billion, reinforcing the Asian gambling hub as the world’s biggest gambling market.

We have been keen followers and supporters of Macau’s growth ever since we first tapped into the Asian gambling markets back on May, 2010. We first started following Macau after advising investors to invest in the three major casino players Las Vegas Sands (LVS), Wynn Resorts (WYNN), and MGM Grand (MGM) all of whom had significant growing interests in Macau’s booming gambling market. Since then we have revised our positions most recently recommending investors to bet strongly on LVS and hold-off on WYNN. To read the original article click on the link: Best Bet on Macau? Las Vegas Sands or WYNN Resorts? So far, our hand has played great as LVS is up more than 20% while the WYNN is down 1%.

As for MGM Grand, they are another big casino player and one to watch with great interest, as they too have been on a soar as of late. We also have been long-term supporters of MGM as you can see in our article: MGM’s Prospects Growing: Huge Opportunity in Macau 

What should you expect in the long-run now from both LVS & MGM? You’ll have to wait and see, tune into Stocks on Wall Street Monday for an updated position on both picks.

Let us know by leaving a comment below, sending us a Tweet, or commenting on our Facebook Fan Page. Also remember to sign up for Stocks on Wall Street’s Monthly Newsletter!

Top Frontier Markets to Invest In

Top Frontier Markets to Invest In

StocksonWallStreet readers know I’ve been bullish on Vietnam.  Bloomberg seems to agree.  The Bloomberg Markets, November 2012 list of the most promising Frontier markets for investors ranks Vietnam #1.  United Arab Emirates is #2 – a market I also think has strong growth potential.

It’s no secret that growth in the U.S. and Europe over the next decade will be outpaced by the BRIC’s and emerging markets.  Adventurous investors looking for even more attractive growth potential should also consider Frontier markets.  Frontier markets tend to be smaller than emerging markets.  Shares of frontier companies are also harder to trade than those of emerging countries.

I like Frontier markets that are moving to Emerging Markets.  Developed capital markets are key to becoming an emerging market.  So, I’m most interested in economies where the stock market is developing and companies are beginning to get access to capital.  Also, it’s worth noting that weakness in China tends to get picked up by Frontier Markets.  Sectors that show the most promise in Frontier markets are technology, energy, consumer discretionary and industrials that benefit from infrastructure improvements.

Vietnam fits the bill on all counts.  It has enjoyed a strong and consistent average GDP growth of 7.2% annually since 2000 and projected cumulative GDP growth from 2012-2016 is 31.4%.

The main ETF tracking Vietnam is the Market Vectors Vietnam ETF (VNM) sank 47% in 2011 and was one of the worst performers in the entire emerging world which fell by an average of 21% in 2011.  These horrible losses were largely due to runaway inflation.  While inflation is still high (around 20%) it appears the country is finally starting to turn around.  VNM is certainly capable of producing huge gains.  VNM is up about 36% year-to-date, suggesting that investors who have a high-risk tolerance may want to consider making a play on this Vietnam ETF.

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