Tuesday, March 13, 2012

Great Energy Stocks To Own For 2014

I was a bit surprised when I took a look at the best performing ETF’s in 2014, especially when I saw that coal related stocks had done so well. There is so much discussion about the older energy sources such as coal, oil and natural gas that have been moving our economy for decades. Climate change discussions as well as rising commodity prices have helped bring alternative or renewable energy discussions to the front table.

The problem of course is that these new energy sources are often much more expensive and while that may change in the future, it is not clear how much time it will take. It seems like I have been reading about electric or hydrogen cars for over a decade and yet there is no sign of when a gasoline free car will be mass produced.

However, I don’t think anyone could argue that there will be some big winners in the alternative energy field. Just imagine the company that can produce that first battery or solar car?? There will be some big winners in this field, just as there were in the early days of pc’s or of the internet. But finding the right one is the tricky part.

The million dollar question is also how much time it will take to get alternative energy in the driver’s seat. Could coal and oil be at the top of the 2014 best performing stocks? It could happen. In the end, I decided not to use any energy picks in my top stock picks for 2014 but I do still believe there is money to be made. By far, the biggest alternative energy category is solar energy.

Great Energy Stocks To Own For 2014:Global Industries Ltd. (GLBL)

 Global Industries, Ltd., together with its subsidiaries, provides construction and subsea services to the offshore oil and gas industry in the North America, Latin America, and the Asia Pacific/the Middle East regions. The company?s services include pipeline construction, platform installation and removal, construction support, diving services, diverless intervention, and marine support services. As of December 31, 2010, its fleet included four derrick lay barges, one pipelay/derrick vessel, one heavy lift ship, one pipelay barge, four multi-service vessels, one dive support vessel, and one offshore supply vessel. The company serves oil and gas producers and pipeline companies. The company was founded in 1973 and is headquartered in Carlyss, Louisiana.

Great Energy Stocks To Own For 2014:Transportadora De Gas Sa Ord B (TGS)

 Transportadora de Gas Del Sur S.A. engages in the transportation of natural gas, as well as production and commercialization of natural gas liquids primarily in Argentina. It operates approximately 8627 km long pipeline system. The company transports its natural gas to distribution companies, industries, traders, producers, and power plant operators. The company?s production and commercialization activities are conducted at the Cerri Complex located near Bahia Blanca. Its natural gas liquid products comprise ethane, propane, butane, and natural gasoline. It also provides midstream services, which consist of gas treatment, gas compression, and wellhead gas gathering services; removal services for impurities from the natural gas stream; and pipeline construction, operation, and maintenance services. In addition, the company offers telecommunication services for telephone operators and other corporate users. Its telecommunication network includes a microwave's digital system with synchronous digital hierarchy technology. The company was founded in 1992 and is based in Buenos Aires, Argentina. Transportadora de Gas Del Sur S.A. is a subsidiary of Compania de Inversiones de Energia S.A.

Great Energy Stocks To Own For 2014:Kayne Anderson Energy Development Company (KED)

 Kayne Anderson Energy Development Company is a principal investment firm specializing in energy investments. The firm prefers to invest in midstream energy companies. It seeks to invest between $10 million and $75 million. The firm typically invests in non-traded companies through equity and debt instruments. Kayne Anderson Energy Development Company is based in Houston, Texas.

Great Energy Stocks To Own For 2014:Linn Energy LLC (LINE)

 Linn Energy, LLC, an independent oil and natural gas company, engages in the development and acquisition of oil and gas properties in the United States. The company holds interests in various properties located in Oklahoma, Kansas, Louisiana, Illinois, Michigan, and California, as well as located in the Permian Basin in west Texas and southeast New Mexico. As of December 31, 2010, it had proved reserves of 2,597 billion cubic feet equivalent of oil and gas, and natural gas liquids, as well as operated 7,097 gross productive wells. The company was founded in 2003 and is headquartered in Houston, Texas.

Great Energy Stocks To Own For 2014:Delta Natural Gas Company Inc. (DGAS)

 Delta Natural Gas Company, Inc. distributes or transports natural gas in central and southeastern Kentucky. It operates through two segments, Regulated and Non-Regulated. The Regulated segment sells and distributes natural gas to its retail customers primarily in 23 rural counties. This segment also transports gas to industrial customers on its system who purchase gas in the open market, as well as transports gas on behalf of local producers and other customers not on its distribution system. The Non-Regulated segment purchases natural gas in the open market, primarily from Kentucky producers, and resells this gas to industrial customers on its distribution system and to others not on its system. This segment also produces natural gas that is sold to Delgasco for resale in the open market. The company owns approximately 2,500 miles of natural gas gathering, transmission, distribution, storage, and service lines; and holds leases for the storage of natural gas under 8,000 acres located in Bell County, Kentucky. It serves approximately 37,000 customers. The company was founded in 1949 and is headquartered in Winchester, Kentucky.

Great Energy Stocks To Own For 2014:Niska Gas Storage Partners LLC (NKA)

 Niska Gas Storage Partners LLC owns and operates natural gas storage assets in North America. It owns or contracts for approximately 185.5 billion cubic feet of total gas storage capacity. The company owns and operates gas storage facilities in Alberta, Canada, as well as in northern California and Oklahoma, the United States. Its gas storage customers include financial institutions, producers, marketers, power generators, pipelines, and municipalities. The company was founded in 2006 and is headquartered in Houston, Texas.

Great Energy Stocks To Own For 2014:Occidental Petroleum Corporation (OXY)

 Occidental Petroleum Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company primarily in the United States. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing, and Other. The Oil and Gas segment explores for, develops, produces, and markets crude oil, natural gas liquids, and condensate and natural gas. Its domestic oil and gas operations are located in Texas, New Mexico, California, Kansas, Oklahoma, Utah, Colorado, North Dakota, and West Virginia; and international oil and gas operations are located in Bahrain, Bolivia, Colombia, Iraq, Libya, Oman, Qatar, the United Arab Emirates, and Yemen. As of December 31, 2010, this segment had proved reserves of approximately 3,363 million barrels of oil equivalent. The Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, and ethylene dichloride products; vinyls, such as vinyl chloride monomer and polyvinyl chloride; and other chemicals comprising chlorinated isocyanurates, resorcinol, sodium silicates, and calcium chloride products. The Midstream, Marketing, and Other segment gathers, treats, processes, transports, stores, purchases, and markets crude oil that includes natural gas liquids and condensate, as well as natural gas and carbon dioxide. This segment also involves in the power generation; and trades around its assets comprising pipelines and storage capacity, as well as oil and gas, other commodities, and commodity-related securities. Occidental Petroleum Corporation was founded in 1920 and is based in Los Angeles, California.

Advisors' Opinion:

  • By Paul At 2011-10-6

    Occidental Petroleum (OXY-N75.722.463.36%) is an integrated oil-and-gas company, with operations in the U.S.

    The Los Angeles-based company has strong operating momentum, having grown 12-month sales 27 per cent and net income 76 per cent. Its stock has been a top performer over a three-year span, having gained 12 per cent a year, on average. Occidental has a market capitalization of $78-billion. It receives positive rankings from 84 per cent of researchers. It is scheduled to report fourth-quarter results on Jan. 26. Analysts forecast a 17 per cent year-over-year rise in adjusted earnings and a 7.6 per cent gain in sales. Occidental has an average earnings surprise rate of 6.6 per cent. It beat the consensus expectation by 8.2 per cent last quarter.

    Like Chevron and El Paso, what is most attractive about Occidental is its relative value amid strong secular growth. Its stock sells for a forward earnings multiple of 13 and a book value multiple of 2.5, 28 per cent and 43 per cent peer discounts. Its PEG ratio, the stock's P/E divided by researcher's long-term growth forecast, of 0.3 represents a 70 per cent discount to estimated fair value, a compelling bargain. Occidental pays a quarterly dividend of 38 cents, converting to an annual yield of 1.6 per cent. It has grown the payout 16 per cent and 18 per cent annually, on average, respectively, over three- and five-year spans. JPMorgan, optimistic about Occidental's long-term trajectory, is skeptical of the recent rally.

    Bullish Scenario: Goldman Sachs has a target of $111, suggesting a 13 per cent advance.

    Bearish Scenario: JPMorgan has a target of $90, implying that the stock will drop 8 per cent.

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