The Energy Strategist is published twice a month, or 24 times per year. That means that twice a year we have a production break of one week; your next issue will be released Wednesday, May 23.

Nonetheless, we’ve seen some big moves during the past few weeks that warrant an update. In this flash alert, I’ll update recent movers and my advice on each stock.

I’ll also recommend subscribers take some money off the table for some of our bigger winners. This is only prudent in light of the big run-ups witnessed in the past few months.

In addition, I’ll recommend some sales to make way for new recommendations to come in the next few months. I see plenty of opportunities for us to exploit, and I want to keep some powder dry for new recommendations.

In addition, I’ve received a few e-mail queries from new subscribers asking which stock I recommend as a play on cellulosic ethanol. That stock is Novozymes (Copenhagen: NZYMB, Frankfurt: NZMB, OTC: NVZMY), a company I outlined at some length in the most-recent issue of TES, King Coal. Novozyme’s US-traded shares continue to rate a buy under $120.

Here’s a brief rundown of my latest advice on some big movers in the portfolio:

Platinum Group Metals (TSX: PTM, OTC: PTMQF)–I added this stock to my aggressive Gushers Portfolio in the Dec. 6, 2006, issue of TES, Looking For Some Upside. The company has a promising platinum mine in South Africa.

The top use for platinum globally is catalysts in diesel cars. This market has been growing rapidly because of the superior fuel efficiency of diesel and supplies of this metal are ultra tight. For the full story, consult the above-referenced issue in the archives.

Platinum Group has been running higher for two main reasons. First, the company’s joint venture to produce platinum has been expanded to encompass a wider area, and the firm announced some positive studies concerning the mine. Second, platinum prices have been skyrocketing: Platinum traded at around $1,150 per ounce back in early December and recently traded above $1,360.

Bottom line: Platinum Group Metals is up 120 percent from my initial recommendation. Although the stock still looks promising, it remains a highly speculative play and it will be some time before the company starts actually producing. Moreover, the recent run-up in the stock prices in a lot of good news about its mine.

I recommend selling out of Platinum Group Metals and booking a gain of close to 120 percent on this play in less than six months.

Potash Corp (NYSE: POT)–Potash is a major producer of fertilizer; I originally recommended the company as a play on the agriculture boom back in the Sept. 20, 2006, issue of TES, Fueled By Food. The agriculture boom is predicated on rapidly growing demand for biofuels coupled with rising consumption of food in Asia.

I’ve updated my outlook on Potash on several occasions, most recently in the April 23 Flash Alert, Agribusiness Update. Potash is up more than 100 percent from my original recommendation.

I still like this stock and believe the fertilizer story has legs. However, if you have a large gain in Potash Corp and haven’t yet booked some gains, do so now.

I recommend taking about a third of your position off the table, if you haven’t already done so. I recommend this only because the stock’s recent rally has left some investors with an oversized position.

Also note that Potash, currently trading more than $200 a share, has scheduled a 3-for-1 split effective May 22. That means you’ll receive two additional shares for each share you currently hold. The stock should be trading around $67 on a post-split basis.

Union Pacific (NYSE: UNP)–Wildcattters Portfolio holding Union Pacific is the largest railroad company in the US; I first recommended the stock in the July 12, 2006, issue of TES, Beyond Oil And Gas.

The railroads are a great play on rising shipments of coal and grains. In particular, Union Pacific is a solid play on rising demand for coal from the Powder River Basin in the western US. Moving coal from this region is a highly profitable route for the company. For the full story on the railroad renaissance, check out the above-referenced issue.

Union Pacific is now up 35 percent from my original recommendation for two reasons. First, most railroads released favorable earnings reports in April, including Union Pacific. The company’s operational turnaround remains on track.

Second, billionaire investor Warren Buffet announced that he’s taken significant stakes in at least two US-based railroads. He mentioned competitor Burlington Northern by name and alluded to at least one other rail play. That lit a fire under the rails.

To protect gains in Union Pacific, I recommend you raise your stops to 107.50. Union-Pacific has also been trading largely above my buy target for the past few weeks, so I’m cutting the stock from a buy to a hold. I believe it’s too extended for new money.

Finning (TSX: FTT)–Canada-based Finning recently touched a new all-time high of $65.25 after reporting better-than-expected earnings and revising its guidance significantly higher for full-year 2007 earnings. I first recommended Finning roughly a year ago in the May 10, 2006, issue, Going Non-Conventional.

Finning, with operations in Europe and South America as well as the Canadian oil sands region, is one of the world’s largest Caterpillar equipment dealers in the world. It has a commanding market share in the oil sands equipment business. The company leases and sells equipment, as well as provides repair and maintenance services.

Caterpillar equipment is used extensively in the oil sands mining business. Trucks are needed to haul all the dirt and bitumen. And because these mining operations are nearly continuous, these big trucks are in almost constant need of servicing and repair. Finning handles that business.

I remain bullish on oil sands. With crude oil prices at more than $60, these developments are highly profitable. A recent spending survey published on the Oil & Gas Journal suggested that the oil sands were one major area where exploration & production companies plan to increase their capital spending significantly this year.

The stock is up 57 percent since I first recommended it in TES. It’s been rated only a hold for weeks now. I now recommend selling half your position in Finning to book a solid gain; I’m raising my stop recommendation on the remaining half position to CD52.50.

OMI Corp (NYSE: OMM) and General Maritime (NYSE: GMR)–This has the dubious distinction of being one of the worst recommendations in TES since its inception. The original recommendation was to buy tanker firm General Maritime and short OMI Corp in equal dollar amounts. The short in OMI was designed as a hedge against the long position on General Maritime. And because General Maritime pays out much higher dividends than OMI, the strategy allowed you to capture those excess yields.

Half this trade has worked out; General Maritime is up around 24 percent from my original recommendation. In fact, the company recently touched a fresh all-time high. Please note that, to calculate General Maritime’s adjusted price, you must take into account the more than $23 in dividends per share paid by the stock since my 2005 recommendation.

However, I was wrong about OMI. Although the stock underperformed General Maritime for some time, the stock got cheap enough to attract interest as an acquisition target. Proven Reserves holding Teekay LNG recently agreed to acquire the firm for $29.25 per share. That’s a 50 percent-plus hit on this short recommendation.

Let’s assume you put $10,000 in this trade–$5,000 long in General Maritime and $5,000 short in OMI. That would have resulted in about a $1,200 gain in General Maritime and a $2,500 loss in OMI. The overall loss on the position would be about $1,300, or 13 percent of the original $10,000 invested.

I recommend covering your shorts in OMI Corp and booking that loss. But hold on to your longs in General Maritime; I see significant upside to come for this company. I highlighted my rationale for owning this company in the February 23 Flash Alert, Dividends, Earnings And Deals.

To make a long story short, tanker day-rates–the fee charged for transporting crude in General Maritime’s ships–continue to remain higher than average for this time of year. And the company’s new dividend policy spells a yield of at least 7 percent, with the potential for a special dividend payment at the end of the year if tanker rates remain firm. Buy General Maritime under 35, and use a stop at 25 to protect your downside.

Linn Energy (NSDQ: LINE)–Linn Energy is a publicly traded partnership I first recommended in the Nov. 22, 2006, issue of TES, Leading Income. The partnership owns actual oil- and gas-producing wells in the US.

Because of its status as a limited liability company (LLC), it pays no corporate-level tax and therefore, is able to pass through the vast majority of its cash flows as distributions. Those payouts are tax-advantaged because the IRS considers around 90 percent of the distributions return of capital.

I won’t reiterate the full story here; for those unfamiliar with partnerships, please consult the November 22 issue. These are my favorite long-term, income-oriented energy plays.

Linn is up some 40 percent from my recommendation six months ago. Nonetheless, the stock recently got hit, falling from $40 back to $36 after releasing its first quarter earnings report. The bottom line: I don’t see anything in the report to be concerned about, and I recommend using this weakness as an opportunity to add to your position in Linn Energy.

There were two issues in the report that caused the stock to slide. The first was a trading hedging loss; the second is an increase in Linn’s costs.

To the first point, Linn uses a variety of different financial contracts to hedge its exposure to commodity pricing, including swaps and put options. Around half of the company’s hedges for this year are actually puts; these options guarantee Linn a minimum natural gas price of around $8.46 per million British Thermal Units (MMBtus), which is above current spot levels.

However, put options also leave Linn with positive exposure should natural gas prices continue to rally, as I expect. I see Linn’s use of extensive hedging as a major positive because it makes the company less exposed to commodity price downside while leaving it levered to potential upside.

However, with hedges, gains and losses are marked to market each quarter. Oil- and gas-producing companies make money by selling these commodities; their profitability rises when commodity prices rise. To offset that, a hedge involves owning a financial contract that will gain value if commodity prices fall. In this way, gains on hedges can offset losses on the sale of commodities in the event prices decline.

When gas and oil prices rise as they did in the first quarter, all of Linn’s hedges will produce losses. Over time, these will even out as Linn produces and sells oil and gas; gains on these sales will offset losses on hedges. But in quarterly statements, these hedges can produce some significant swings. This is normal and nothing to be concerned about.

A number of news services published releases fingering the hedge losses as the reason the stock was down. This is ridiculous. In fact, on the company’s conference call, two analysts asked a battery of questions in a 45-minute period. Not one of those questions involved this hedge issue.

The real concern raised during the call, and the focus of most analysts’ queries, was a jump in expenses and production costs and Linn’s forecasts for future expenses. This would potentially be a problem, but in this case, I’m not worried.

First, most of the expense jump was due to Linn staffing up to handle the major acquisitions of new reserves it’s made in the past six months. Management pointed out that half of Linn’s production comes from reserves it’s owned for only six months; these are large, new acquisitions. And third-party operators are now managing some of these wells as part of the transition in ownership. Eventually Linn will run most directly.

Bottom line: Linn is seeing staffing, drilling and general management costs for these new wells rise in the short term. But the result of these investments will be increased production for the company. This production will start to show up in the form of rising cash flows later this year. I see such investment as worthwhile.

The company is also spending on bolstering pipeline capacity near some of its wells in Appalachia. The benefits are already showing up in the form of increased production. All these investments involve some short-term costs, but the result will be higher production and distributions for unitholders.

Management also reaffirmed its intention to increase the company’s payout to 57 cents per unit for the second quarter, a rise of nearly 10 percent from the dividend Linn just paid on May 15 for the first quarter. I can’t think of any better sign of confidence than that.

Again, I recommend using the weakness to buy Linn Energy or to jump in if you don’t already own the partnership.