T. Boone Pickens knows his stuff when it comes to the energy industry. Its always good to know about his favorite picks. He has the knowledge to know whats best, and has the insider view to make those choices. Want to know his current favorites? Investment Underground has the scoop.
EOG Resources, Inc. (EOG) – Although EOG is up year-to-date, the stock is not quite trading at the $110 to $120 range it was earlier in the spring. Regardless, the company still has had a number of positive headlines. The company predicts strong growth for 2011, and dividends were increased for the 12th time in 12 years. Financial success aside, EOG Resources was also named one of Fortune’s 100 Best Companies to Work For. Of course though, EOG’s future prospects will be highly dependent on the price of oil. Oil prices have been shaky as of late due to uncertainty surrounding the U.S. debt ceiling and the eurozone’s fiscal problems, but it is hard to imagine oil prices going much lower. With Saudi Arabia increasing production and the International Energy Agency having already put out some strategic reserves, it seems unlikely that supply can go up further. Keep in mind that EOG’s focus on oil over natural gas has been increasing recently, and this change looks like it will be beneficial.
Noble Corp. (NE) – Year-to-date Noble Corp. hasn’t appreciated much, but the stock has traded as high as $46. Perhaps the most exciting headlines for this company came a year ago when it announced that it was buying Frontier Drilling. This was a tremendously important deal that significantly increased Noble’s number of offshore drilling units. Through Noble’s acquisition of Frontier Driling, the company also operates the FPSO Seillean, which has played an important role in helping with the Deepwater Horizon oil spill. Many analysts are excited about this stock – of those who cover it, 56% recommend buy and 37% recommend hold.Furthermore, a poll by Bloomberg showed that on average analysts believe the stock could increase over 30% in the next year. Noble will release earnings on July 20th, so look for this to play an important role in the stock’s near-term performance.
Apache Corp. (APA) – APA’s stock price has more or less stagnated this year, and the company has not had too many big headlines. One recent development though was when the company found eight new oil wells in the Faghur Basin of Egypt. Apache is also having better than expected success in the Forties field of the North Sea. As discussed in this article, Charlie 4-3 is putting out 12,567 barrels per day. Apache also stands to benefit from its share in Kilimat LNG, discussed above in the EOG Resources paragraph. Additionally, Apache will be teaming up with Crosstex (XTEX) for a natural gas processing plant in Texas’s Permian Basin. More details on that development can be found here. In many ways, Apache will be affected by the same factors as EOG Resources.
Occidental Petroleum Corp. (OXY) – OXY has been increased quite a bit in the past 12 months, and some investors believe that further moves upward are ahead. In fact, if the stock can break resistance at $108, it could move all the way up to the mid-110s. The company is already trading at 17.41 times earnings though, a far cry from P/E ratios like 11.92 and 15.16 for competitors Exxon Mobil (XOM) and DuPont (DD), respectively. Price-to-sales is even more outlandish at 4.25 for OXY compared with 1.47 for DD and 1.12 for XOM. Q2 earnings will be announced on July 26th though, so these statistics could certainly change at that time.
BP plc (BP) – How not to handle a corporate crisis. Although this most recently applies to News Corp. (NWSA), some journalists are already making comparisons to BP’s debacle year ago. Regardless, BP has moved forward from the infamous oil spill, and investors now anxiously await July 26th’s earnings report. Before that can happen though, BP is currently being affected by a strike on the part of South African fuel workers.Unfortunately for shareholders, the company has also experienced a leak in its Prudhoe Bay (Alaska) pipeline. The pipeline was closed down for the time being, but renewed questioning of the company’s safety procedures has begun. On the other hand, this headline does not seem like it will have too much long-term impact considering all the other things that are happening in this news-filled summer.
T. Boone Pickens knows what he is doing. Many of these companies are large oil companies with a lot of potential. If you are interested in investing in big oil, these are some solid picks.
Quotes taken from report by Investment Underground, Read the entire article here.
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