My Own Analyst

Syndicate Bargain?

I haven't mentioned MTDR before, but it's a great story.  They are offering stock (8.5mm shares), which could give an entry.  The problem is that the stock is a black 1.  I would still be comfortable saying to buy near 15 - 14 would be really nice but not likely...

ROSE

Given that ROSE is up since we bought it and the earnings will be released today and given 

that other oil companies have disappointed in their earnings and also given that ROSE hit a 

one year low exactly a year ago when they released their earnings on a day like this, what 

do think about it:  Hold, Sell, or Sell half???  FYI, I'm up 9.6% since I bought it. 

I like it - don't have a good feeling one way or the other, but XOM and CVX reports aren't very helpful in determining...  Hold

 

Income Idea

If you are into MLPs, take advantage of the drop yesterday in EQM, which just did a secondary.  They have bought an asset at a bargain price from EQT and are jacking the dividend.  This is a great LT story.  I follow it because my client owns it.

BCEI Misses

BCEI had an operational issue only from what I can gather and reported a slight miss (.40 vs .41 and sales about 1.5% short of the consensus).  I could just as easily gone with this one but am glad we added ROSE instead.  With that said, BCEI is probably a better story from growth perspective.  I like the stock near 34 and have a 53 target that will be unchanged most likely.  At 34, I see technical support and, thus, 56% return over the next year.  If I could sell ROSE at 47 and buy BCEI at 34, I would probably do that trade.  

This ROSE Smells Good!

I listened to the call and liked what I heard.  They seem very conservative.  One thing that came out is some upside from dealing with something that has been troubling them the past few quarters (condensates).  It was a little technical for me, but even I understood what they were saying.  They also pointed to a lot of activity in Reeves County, where the Wolfcamp is.  This is a game-changer - they are a great Eagle Ford play with now a new opportunity.  I liked this horizontal play when CRK bought it, but they overreached and didn't have the right balance sheet.  ROSE is going at it 2X what CRK could afford.  ROSE got the pain out of the way by selling some stock at 42.50.  Is ROSE the best?  Who knows.  I like BCEI too, and there are several others.  The good news is that these production growth stories aren't priced very expensively.  My 61 target on ROSE could easily be 78 (use 7.5X EV/EBITDA instead of 6X).  Look for the big boyz to keep buying up these smaller companies.  ROSE has cleaned itself up and now is really almost completely a 2-basin play (Eagle Ford and Permian).

What the Shale

Carlos, who was right about DORM, wants to know what I think of "frack plays".  I am careful not to be too obvious, so let me tell you some that are perhaps a bit less known as well as those that are very well known.  CRR is one (they make the best proppants, but I think that their product is overkill and not able to compete on price for most plays.  LUFK - pressure pumpers used in shale like Bakken.  Lots of E&P plays - OAS and BCEI are good examples, but there really are lots.

Not so obvious:  TITN has exposure to CO and ND shale plays.  CLH helps keep sites clean.  RAVN sells liners (so does CRR) used in drilling.  Several MLPs like PAA and MMP do the infrastructure.  I have mentioned PRIM and I would throw out MTRX.  CLB is a service provider that helps evaluate potential wells and also sells charges used in fracking.  OIS lodges workers (CLH too).

This is a start...

CRK Question

CRK is very weak today, and a subscriber was wondering why.  I just learned that Global Hunter is out with cautious expectations following their capital budget that was released Monday, suggesting that they are likely to hit the low end of consensus for 2013.  They lowered their estimates and target - sorry, I am just repeating this and don't have more information.   I continue to think CRK is very inexpensive but carrying too much debt.  If oil prices sink, they are in trouble...

I see some support 13-13.50, but, as I have said, I am trying to find other ideas rather than this one. 

SLB: Trash or Treasure?

SLB is down this morning on news of contract delays and seasonal slowdowns in North America and weak US/Canada land.  They expect Q4 EPS to be hit by 5-7c.  I think that this is a buy spot.  I have had my eye on this one for several months now.  It had a great low near 60in the summer, rallied back above 75.  I like the idea of adding it below 70 (low this morning is 69.62 - 68-69 is the right entry, maybe it doesn't get there).  Stock is cheap at close to 9X trailing EV/EBITDA...

Follow Up on the Trading Call

I should have mentioned that MCF is a black 5 next week and that it is over 2 units oversold.  They are also paying a $2 special dividend - this stock should be higher in the coming weeks.  If I had a slot, I would use it for a long MCF targeting 45 over two week...

Another Management Change Trading Buy

MCF has been hammered ever since the CEO took a medical leave of absence. I wrote about this on Seeking Alpha.  It turns out that they have had some bad luck too, with a few dry holes.  Today, I am a lot more bullish at a lot lower price near 40 after they named a new CEO.  The guy is a great fit with a good history - he gets companies sold.  This one is hard to value - people smarter than me say it's worth a lot more.  This could be a catalyst for longer-term investment perhaps, but my call is that this is a great trading opportunity...