Stock Talk – May, 2015

Stock Talk

Don D.

Don D.

In following the oil business for some years and knowing there is always a significant cash outlay for drilling and completion of wells, Let me ask with David Einhorns recent comments about PXD and a few other E&P companies which seem to be profitable what do you feel will be the long term outlook for these stocks. We all knew at 45 many would be stretched but with recent financing at lower rates, and oil moving up should they find a happy medium of profitability? Companies owned are WLL, EOG, PXD, CXO,and MTDR in this area.

Robert Rapier

Robert Rapier

Yeah, I don’t think Einhorn really understands this business. I saw a pretty good take down of his claims here:

http://oilpro.com/post/12751/famed-investor-david-einhorn-attack-fracking-joke

Having said that, the article does correctly point out that there are elements of truth in his thesis. I do think these companies can be comfortably profitable with oil back at $60, which is a price I don’t expect to last over the long-haul. However, in the short term I think oil prices a bit higher than this are already priced in. I am going to look at the share price for some of these companies when oil hit $60 on the way down, and where it is now. My intuition is that they were all quite a bit lower when it hit $60 in the fall, and this recent rally needs prices to rise a bit more for the value to be there. If you are in for the long-term, I wouldn’t sweat it. If I was a short-term investor, I believe I would start to get cautious.

Don D.

Don D.

Robert, this was a great piece and I appreciate it very much, Yes I am a long term investor in all these and add when major dips occur, just as I have in the MLP’s over the past 6 years of so. Even with all the TV time Warren Buffet attracts big oil (which I feel are anemic) have tied or beaten him so I will keep driving my investments by deeper analysis and also your help though some of this. Thanks.

C. Fisher

C. Fisher

Robert
Thank you for the last reply. (WNR and VLO)
Seems the correction continues with WNR today.
I am going to sell. Should I wait and see if the options next friday take it back up a few points?
Kind regards

RTR

RTR

Dear Bob & Igor – Reference the news update concerning the announcement of Telsa Energy and its new residential and business-scale rechargeable batteries, CEO Elon Mush has stated the initial demand for these batteries has greatly exceeded expectations. Can you provide us any recommendations on what would be your top picks for those companies supplying lithium, graphite, and cobalt that are required for manufacturing these battery products? As always, thanks for your assessment, comments and recommendations!!
Sincerely, RTR

Reclar

Reclar

Robert
Any thoughts on Range Resources (RRC)? I have noticed no information on this company lately. A natural gas producer that could benefit from the coming increased natural gas consumption.

Donald Shaw

Donald Shaw

Igor

Re your reply Just close your eyes and think of England — Igor

I prefer France

Don D.

Don D.

I first want to thank you for having your energy chat sessions they are helpful. I have been following energy for many years and recently seem to be finding a little dislocation from the movement in the crude pricing and the underlying stocks. Crude up .8% most oil positions down 1-2%. Is there a situation where large funds are starting to move the prices rather than true investments? Personally most of the positions I have are for long term so not as concerned but still making it hard to understand the current price movements.

Robert Rapier

Robert Rapier

Don, I think it has more to do with expectations. I keep saying I am going to do it; maybe I will for next week’s TEL — but I want to look at the share price for different oil companies when oil hit $60 last fall and when it hit $60 this month. My feeling is that the prices will be lower across the board in the fall because of the expectation that oil prices would keep falling — and vice versa now. If oil settles in here at $60, we could see some of those that have run up pull back some. I am actually taking some profits right now.

RTR

RTR

Hi, Bob – Thanks for your article Shining a Light on the Solar Enablers. I am surprised that you did not mention Solar Edge Technologies [NASDAQ: SEDG]. This company had an IPO on 2/28/15, and its products supporting the solar panel complex installation business include power optimizers, PV inverters, and a Web-portal for module-level monitoring and fault isolation. According to Thompson-Reuters assessment, this company is projected to have 85% growth within the next year. Evidently, there appears to be a strong demand for this company’s products. Do you have any information or comments on this company that you can provide us? Thanks again!
Regards, RTR

Robert Rapier

Robert Rapier

Solaredge did pop up during my research, it just wasn’t in the Top 5 suppliers. Their financials are all moving in the right direction, and the stock has been on fire since the IPO. But this looks like one for those with pretty high risk tolerance. It’s a very volatile sector.

RTR

RTR

Bob – OK. Thanks very much for your response and comments!

Regards,

RTR

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