Since my last column pointing out the vast value I saw in back month crude futures, I wanted to try to translate that opportunity into stock ideas. I invited subscribers to email me with their thoughts using these criteria – Liquids potential over dry gas, direct investment in the ‘hot’ plays in shale but probably excluding the Bakken (mostly overpriced and overhyped); and underperforming, most likely because of a less than stellar balance sheet.
All of these would benefit marvelously from a crude barrel price that was under $90 less than two years from now, but could be hoped to be projected at closer to $110 a barrel or more as they arrived as the “spot” (current) month.
You have impressed me – and humbled me. First, I must be very careful what I write: I see that I have an extremely engaged audience that enjoys scoping out energy ideas almost as much as I do – and your ideas are not coming without homework and knowledge: I got some fantastic stock ideas, so many in fact that I’m going to defer my own ideas for another column and work with just a few of yours – they’re terrific.
My friend Cynthia suggests Resolute Energy (REN), a $600M market cap company engaged in the Areth region of Utah as well as holding potential acreage in the Permian basin. Resolute’s had a tough time, and the chart shows their stress, having been as high as $11.50.
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