8/21/13: Better Uses for Ethanol

By Benjamin Shepherd • August 21, 2013

With its low production costs for natural gas that now roughly stand at breakeven, Cimarex could easily surpass expectations if natural gas prices conform to the forecast and remain above $4 per MMBtu for the foreseeable future. This company is a solid, conservative play on rising natural gas prices.
I’m adding Cimarex Energy to the Resources sleeve as a buy under 76.
Braskem SA (NYSE: BAK) is a Brazilian petrochemical company which uses traditional feedstock to produce a wide array of products, including ethylene, benzene, gasoline, liquefied natural gas and vinyls. Those traditional operations account for about half of the company’s revenues. Most of the remainder of revenues comes from the production of “green” chemicals.

Braskem SA is a new addition to the Long-Term Portfolio and rates a buy up to 20.

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Newcrest Mining (ASX: NCM, OTC: NCMGF) was long one of the lowest cost producers, but troubled acquisitions and lower realized gold prices have brought its production costs largely in line with the rest of the industry. It has also been plagued by delays, which have left it well short of its own production targets and nicked its returns on investment.

While Newcrest Mining finally appears to be getting back on track, it will be a costly and arduous process, so I’m taking the loss and selling.

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