Energy Stocks

[Duke of Swine]

Anybody else adding energy stocks?  I feel like I've been trying to catch a falling knife this past year.  Have purchased CHV, XOM, NOV, and EPD.  Got the CHV and XOM at what I feel are a decent price, but am way upside down in NOV.  I'm planning to hold for the long term and enjoy the dividends.  These companies should be good long term investments, don't you think?? 

[BigBrandonAllenFan]

I bought a very modest portion of Fidelity Select Utilities (FSUTX) back in June, and I am still stuck with it, sitting about -8% down currently.  I've been reluctant to double my investment as I often would with subsequent drops after purchase.  The utility market is just a little uncertain.  I had a friend that owned a huge chunk of the utility company that supplies most of Florida and other markets (Nextera I think it is), and he sold it at the beginning of the year on gloomy forecasts.  He was right to make the move, as most utility stocks are down for the year.

[TheJoeyBucketz]

I bought a very modest portion of Fidelity Select Utilities (FSUTX) back in June, and I am still stuck with it, sitting about -8% down currently.  I've been reluctant to double my investment as I often would with subsequent drops after purchase.  The utility market is just a little uncertain.  I had a friend that owned a huge chunk of the utility company that supplies most of Florida and other markets (Nextera I think it is), and he sold it at the beginning of the year on gloomy forecasts.  He was right to make the move, as most utility stocks are down for the year.

Expect any equity whose value comes largely from their dividend to sell off as(if) interest rates go up.

Some of your trading ideas are interesting. I wish you luck!

[BigBrandonAllenFan]

Expect any equity whose value comes largely from their dividend to sell off as(if) interest rates go up.

Some of your trading ideas are interesting. I wish you luck!

I knew better when I bought the stock, but after a week of sharp drops, I thought what the heck, I'll grab a little piece.  Problem is/was, it has slowly dribbled downward since, so I'm just hanging in there with it.  It only about 2 1/2% of my portfolio, so it really isn't a biggie at all.  But I still wish I wouldn't have bought it.  Hindsight is 20/20.  I bought an equal portion of Fidelity Select Canada near the same time, and it has done the same, down about 10%, and slowly trending downward.  Those are the only two pieces of stock that I have gotten hung on thus far this year, so if can stay at only 5% of my port tied down, I'm not complaining.

Good luck in your finacial endeavors too, G2D. 

[aristotle]

I haven't yet, but I'm watching them closely. Specifically, CVX, XOM, KMI, NOV. I'm actually watching the price of crude for entry. Looking for a WTI of $35.

I'm also watching some other commodity names like BHP Billiton, US Steel, and Freeport Mac.

[aristotle]

Tested the water today on KMI. I'll add to the position at $12 and $10 if it keeps going down. If the continued rout in crude coincides with a bigger market move downwards, I'll load up under $10.

[HawgWild]

I think these (coal, oil & gas) stocks continue to fall. I saw where natgas had dropped below $2.00 for a brief period this morning. That's insane.

[Arkansasbeaux]

Several of the companies mentioned in this post seem to be at great values. I just ended up adding to my existing shares of Invesco's energy fund. It's basically a who's who of the companies already discussed. Although if I were to only pick a couple individually, I am a fan of CVX and SE. The KMI will probably end up just fine in the long run. But there's no telling how long it will take for energy prices to go back up. So all I am telling people is to be patient and just let those dividends reinvest in the mean time.

[HotlantaHog]

Good site for value-oriented investors is www.mcdep.com -- energy analyst Kurt Wulff's site.

He is generally into deep value picks. It is not for someone looking for quick gratification.

[aristotle]

I don't normally day trade, but that KMI dividend cut was much more than anticipated. A cut was priced in to keep the IG rating, but it was a massive slash. I used the short squeeze to get out +8%. I'll look at it again after the FED announcement.

[HawgWild]

Taking on debt to keep dividend?!

CEO Bob Dudley told Bloomberg TV that the company can raise debt to have a leverage ratio as high as 25% to keep its dividend, even as oil prices slide further. In 2015, BP had a ratio of 21.6%.

[aristotle]

Taking on debt to keep dividend?!

CEO Bob Dudley told Bloomberg TV that the company can raise debt to have a leverage ratio as high as 25% to keep its dividend, even as oil prices slide further. In 2015, BP had a ratio of 21.6%.

Even before this controversial plan they were facing a credit downgrade. It's certain now. S&P will cut them this month, with "outlook negative". I wonder how much Dudley figures on paying for that debt, because it's about to get more expensive. 

http://www.bloomberg.com/news/articles/2016-02-02/bp-ceo-says-debt-can-rise-to-sustain-dividend-during-oil-slump

[BigBrandonAllenFan]

Expect any equity whose value comes largely from their dividend to sell off as(if) interest rates go up.

Some of your trading ideas are interesting. I wish you luck!

Thank you sir.  I wish you the same.

On the subject, I sold a butt load of Fidelity Select Gold this afternoon.  The stock gained 5.94% just today, and it is up 12% over the last week and a half. http://www.marketwatch.com/investing/fund/fsagx ...I REBOUGHT the stock (for the sixth time in 13 months) 3 weeks ago when it dipped below $13.00 per share again.  As indicators showed before close of market this afternoon, the stock was taking a big jump today. It closed at $14.97 per share today. It's all about watching the market day to day.  I've made a chunk trading in and out of that single stock.

[BigBrandonAllenFan]

Tested the water today on KMI. I'll add to the position at $12 and $10 if it keeps going down. If the continued rout in crude coincides with a bigger market move downwards, I'll load up under $10.

Excellent strategy.  Good luck sir.  I think you'll find yourself a winner sooner than later with the stock.

Most analysts forecast that crude oil will settle in around $50.00 a bbl by years end.  I think they are probably right.

[BigBrandonAllenFan]

I think these (coal, oil & gas) stocks continue to fall. I saw where natgas had dropped below $2.00 for a brief period this morning. That's insane.

About 6 weeks ago raw nat gas dropped to $1.85 per CF.  I bought in the Fidelity Nat Gas fund then, this after selling the same stock two weeks earlier for a modest profit.  Then, as the price rose back to $2.30 per CF a week or so ago, the stock fund didn't follow, and actually went backwards the other way.  I'm down about 12% on the investment as of today. 

[HawgWild]

Conoco cuts dividend from $.74 to $.25. That's a trim. Who's next?

[BigBrandonAllenFan]

Conoco cuts dividend from $.74 to $.25. That's a trim. Who's next?

That spells "Conoco is hurting". 

Here is what I am waiting for...

At some point, if oil prices continue tanked, one of the major players in the world market is likely to have to seek a merger with another major, or fold completely.  When/if that happens, get on the oil company stocks hard and heavy, very quickly, or you will miss the bus.  When I say quickly, I mean at first hint.  About the worst you will do is break even or loose a few of percent if nothing comes of pre-merger talk.  Crude really can't go any cheaper than now.  But if the first hint becomes reality, a 25% to 30% gain in a short period of time is a very real prospect. 

Just something to watch for.

[aristotle]

That spells "Conoco is hurting". 

Here is what I am waiting for...

At some point, if oil prices continue tanked, one of the major players in the world market is likely to have to seek a merger with another major, or fold completely.  When/if that happens, get on the oil company stocks hard and heavy, very quickly, or you will miss the bus.  When I say quickly, I mean at first hint.  About the worst you will do is break even or loose a few of percent if nothing comes of pre-merger talk.  Crude really can't go any cheaper than now.  But if the first hint becomes reality, a 25% to 30% gain in a short period of time is a very real prospect. 

Just something to watch for.

I've been watching for the same thing, BigBrandonAllenFan. I don't think we reach "capitulation" until a big one goes under and sparks fear of contagion. When that happens, buy the strongest. And hopefully ride the growth and dividend into retirement.

[ricepig]

I've been watching for the same thing, BigBrandonAllenFan. I don't think we reach "capitulation" until a big one goes under and sparks fear of contagion. When that happens, buy the strongest. And hopefully ride the growth and dividend into retirement.

I've only got 3 "energy" stocks in my portfolio, Centerpoint, Atmos, and Royal Dutch Shell B. One hitting holding steady, one hitting new highs, and one bought too soon late last year, haha. They are currently paying me about 5% on my money, I hope it continues.

[HawgWild]

Look for CNP to make another leg up this week. I'm guessing that Zack's will upgrade them to a buy after reading what they said about them in this article. https://finance.yahoo.com/news/heres-why-utilities-buy-now-200208164.html

[aristotle]

Chesapeake down 50% today on multiple sources indicating they've hired bankruptcy attorneys. They deny it, of course, but the stock market ain't buying the denial.

http://www.cnbc.com/2016/02/08/energy-shares-plunge-in-early-rout-chesapeake-williams-both-off.html

[McKdaddy]

I'm sure HiM got out of CHK at the absolute top.

[HawgWild]

CHK was at $.59 per share in 2/1999 and then rose to $62.40 in 5/2008. These G&O energy companies really are roller coaster stocks.

[ricepig]

CHK was at $.59 per share in 2/1999 and then rose to $62.40 in 5/2008. These G&O energy companies really are roller coaster stocks.

Why, were did you find my exact entry and exit points?

[HawgWild]

Why, were did you find my exact entry and exit points?

HiM, you're back!

[HawgWild]

I heard Yellen say that the US is a "net importer of oil" during her testimony today. While accurate wasn't it a bit misleading in that up until the last few weeks US oil companies were prohibited from exporting crude oil?

And, with crude production levels up, is anything in place requiring US refineries to replace imported crude with of similar grades of US crude? If not, why?

Lastly, oil production continues to out strip demand. How long before storage is maxed out. Anyone see this addressed before?

TIA - cabin fever and watching my portfolio atrophy.

[Old Tusk]

From what I've read storage is very close to maxed out. That is why some are forecasting much lower oil.

[HotlantaHog]

I heard Yellen say that the US is a "net importer of oil" during her testimony today. While accurate wasn't it a bit misleading in that up until the last few weeks US oil companies were prohibited from exporting crude oil?

And, with crude production levels up, is anything in place requiring US refineries to replace imported crude with of similar grades of US crude? If not, why?

Lastly, oil production continues to out strip demand. How long before storage is maxed out. Anyone see this addressed before?

TIA - cabin fever and watching my portfolio atrophy.

It is not misleading. The point was that falling oil prices in theory should have a positive effect on the economy, because the gains of consumers exceed the losses to producers. That is true because the US is a net importer of oil. The countries that export more energy than they consume -- Brazil, Russia, much of the Middle East -- are being crushed by falling prices. The US is getting hurt too, but it is in fact true that over time the gains to consumers should outweigh the losses to producers.

[theFlyingHog]

From what I've read storage is very close to maxed out. That is why some are forecasting much lower oil.

We're taking bids on our swimming pool

[HotlantaHog]

Warren Buffett, a smart value investor (to understate it quite a bit), just bought an energy stock. Not necessarily a sign we are near the bottom, but that one smart guy thinks there is value in beaten down energy stocks.                               http://www.bloomberg.com/gadfly/articles/2016-02-17/warren-buffett-s-kinder-morgan-bet-needs-oil-s-help

[HawgWild]

Still pumping more oil world wide than is being sold. Iran's coming on-line and there's no agreement by OPEC on productions levels. Seems to me that in this environment oil prices have no place to go but down.

"Primary and secondary storage (for crude) is pretty much full."

[ricepig]

Still pumping more oil world wide than is being sold. Iran's coming on-line and there's no agreement by OPEC on productions levels. Seems to me that in this environment oil prices have no place to go but down.

"Primary and secondary storage (for crude) is pretty much full."

It's time to buy, the shoe clerks and even the drive through order takers are saying there's too much oil.

[HawgWild]

7% WTI bounce on continuing over supply data. That makes sense.

[ricepig]

7% WTI bounce on continuing over supply data. That makes sense.

Rollover day.

[HawgWild]

Riddle me this ricepig: why are crude prices continuing to rise when production levels are still exceeding demand?

Is the dramatic increase in CHK a "celebration" of McClendon's death?

[ricepig]

Riddle me this ricepig: why are crude prices continuing to rise when production levels are still exceeding demand?

Is the dramatic increase in CHK a "celebration" of McClendon's death?

Well, as the say in the futures markets, "the trend is your friend". Futures markets go as they wish, sometimes they pay attention to fundamentals, sometimes they don't. Eventually, the fundamentals will come home to roost, but right now they see prospects of smaller production, summer driving, and a small increase in world consumption. I read where we have a billion barrels in storage world wide, and it will take until 2021 to work it out of the system.

[HotlantaHog]

Demand in emerging markets seems to have stabilized or increased some, and fears of a U.S. recession or worldwide recession now appear overblown (with first quarter GDP likely to come in a bit over 2 percent.)

[Kenny Hawgins]

Conoco cuts dividend from $.74 to $.25. That's a trim. Who's next?

It'll come back up.  They're really doing a lot to increase efficiency in pumping.  My dad works with their west texas offices and they've cut the cost to pump in half in the last year. 

The bump in oil that we've seen over the last couple of days will likely continue once January and February production numbers come out.  We just now got December numbers and the next two will be significantly lower, which should be another shot in the arm.

[Kenny Hawgins]

Demand in emerging markets seems to have stabilized or increased some, and fears of a U.S. recession or worldwide recession now appear overblown (with first quarter GDP likely to come in a bit over 2 percent.)

You may be right but I don't know if I'd want to bet on it.  Take a look at any of your major indexes since last June and there's a pretty solid trendline heading downward in price, volume, and RSI. 

[BigBrandonAllenFan]

  Crude really can't go any cheaper than now.  ...a 25% to 30% gain in a short period of time is a very real prospect. 

Just something to watch for.

Exactly what has happened. 

I bought Fidelity Select Natural Gas when the price of nat gas tanked back in December.  I stated so here in another thread back then.  I lost on the stock before I rebounded, but am well in the black now at +15% as of today's close.  I'm still holding the stock, as prices should continue to rise over the spring and into the summer.  Forecasts are for oil to level off at about $60 a bbl by December 2016.  I think that is probably a fair estimate, which will lead to continuing non-renewable energy source increases.  I think I can hold for another 15% increase in share price before selling at +30%.  That will probably not be past mid April..

I doub't we will see $26 a bbl crude ever again.

[ricepig]

Exactly what has happened. 

I bought Fidelity Select Natural Gas when the price of nat gas tanked back in December.  I stated so here in another thread back then.  I lost on the stock before I rebounded, but am well in the black now at +15% as of today's close.  I'm still holding the stock, as prices should continue to rise over the spring and into the summer.  Forecasts are for oil to level off at about $60 a bbl by December 2016.  I think that is probably a fair estimate, which will lead to continuing non-renewable energy source increases.  I think I can hold for another 15% increase in share price before selling at +30%.  That will probably not be past mid April..

I doub't we will see $26 a bbl crude ever again.

I guarantee you'll see $26/barrel again, unless you're dying soon.

[BigBrandonAllenFan]

I guarantee you'll see $26/barrel again, unless you're dying soon.

Time will tell, old friend..

I hope you are right.  Not about the dying soon part though.

[BigBrandonAllenFan]

I bought a very modest portion of Fidelity Select Utilities (FSUTX) back in June, and I am still stuck with it, sitting about -8% down currently. I've been reluctant to double my investment as I often would with subsequent drops after purchase.  The utility market is just a little uncertain.  I had a friend that owned a huge chunk of the utility company that supplies most of Florida and other markets (Nextera I think it is), and he sold it at the beginning of the year on gloomy forecasts.  He was right to make the move, as most utility stocks are down for the year.

After 10 months, and falling 15% behind at the bottom, I am finally back to even on my June 2015 FSUTX purchase.  That was a long haul, but it constituted only about 4% of my portfolio.  I think I can hang in for five or six percent profit now and at least make a modest positive out of the buy, as energy stocks are forecast to continue to rise at least mildly over the coming 60 days.

Never sell when behind.  It's kinda like deer hunting.  You may go a long time before you see a buck, but eventually, he'll show up.

[HawgWild]

NRG up 20% today. I don't often get moves like this.

[ricepig]

NRG up 20% today. I don't often get moves like this.

Looks like a good exit point.

[HawgWild]

A better exit would have been to sell back in 2014.

[ricepig]

A better exit would have been to sell back in 2014.

Well.........

[HawgWild]

Apparently I only know how to buy and hold and hold and hold........... Remember, I've still got my 1,000 gram silver bar I bought when the Hunt brothers were "cornering" the silver market. I ended up using it to weight down a piece of driftwood in an aquarium. Maybe it'll go bankrupt on me like SD. I'm going to be writing that loss off for 5 years.

[ricepig]

Apparently I only know how to buy and hold and hold and hold........... Remember, I've still got my 1,000 gram silver bar I bought when the Hunt brothers were "cornering" the silver market. I ended up using it to weight down a piece of driftwood in an aquarium. Maybe it'll go bankrupt on me like SD. I'm going to be writing that loss off for 5 years.

Oh, I seldom sell, my late uncle said you "buy" stocks, haha. I've had a few that should have been dumped, and a few that I came out smelling like a rose by holding.

[HawgWild]

It ended up a little more than 29% for the day and it's up a tad in the after market. It'll drop back a bit tomorrow but it was a nice for a day.