Big Oil Stocks

Smart Grid Investing Ideas

admin — Tue, 07 Sep 2010 10:16:35 +0000

By Jeff Siegel

Last year, a group of about 200 people decided to sue Pacific Gas & Electric, claiming that newly-installed smart meters had jacked up their usage.

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Energy Sector and Stocks Analysis from Seeking Alpha

Devon Energy Offers Onshore North American Value

admin — Tue, 07 Sep 2010 05:51:20 +0000

Kurt Wulff (McDep Associates) submits:

Contrarian Buy-recommended Devon Energy (DVN) offers unlevered appreciation potential of 43% to a McDep Ratio of 1.0 where stock price would equal estimated Net Present Value of a share. Second quarter results released on August 4 displayed a positive uptick in oil production. New volumes come from the Permian Basin, a traditional area of operation where the company has quietly been expanding its lease holdings.

Today’s oil price and new technology are fueling yet another West Texas oil boom. Management talks of the “Avalon Shale” as a new area of interest joining traditional formations like Bone Springs. Oil is also growing along with natural gas from the Cana Shale in Oklahoma. Reserves in that rapidly expanding resource may multiply further if early results from a denser drilling pattern are confirmed. Meanwhile, a high level of cash flow matched with adjusted reserve life supports estimated NPV in an industry context.

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Energy Sector and Stocks Analysis from Seeking Alpha

FuelCell CEO Discusses F3Q2010 Results – Earnings Call Transcript

admin — Mon, 06 Sep 2010 16:41:21 +0000

FuelCell Energy Inc. (FCEL)

F3Q2010 Earnings Call

September 2, 2010 10:00 AM ET

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Energy Sector and Stocks Analysis from Seeking Alpha

Refinery Additions Lagging Oil Demand Growth

admin — Mon, 06 Sep 2010 12:16:56 +0000

Evaluate Energy submits:

By Eoin Coyne

A total of 1.41 million b/d of crude distillation capacity will come onstream during 2010, falling well short of the IEA’s expected increase in total world demand of 1.9 million b/d this year, according to a new analysis by Evaluate Energy. What’s more, the new capacity is not always coming onstream where it is most needed, with Chinese capacity increases in particular lagging behind the pace of oil demand growth. The analysis is part of Evaluate Energy’s new refinery projects tracker service and aggregates capacity expansions at existing refineries as well as announced new refinery construction.

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Energy Sector and Stocks Analysis from Seeking Alpha

Trends in Oil Price for the Remainder of 2010

admin — Mon, 06 Sep 2010 07:51:42 +0000

Ivan Kitov submits:

Three months ago we presented a forecast for the PPI for crude oil and oil price in August 2010. Tentatively, we put the index at the level between 160 and 180 in August 2010. Crude oil prices corresponding to this level of index should be between and per barrel. It’s time to revisit the price.

All our estimates are based on the existence of long-term sustainable trends in the differences between various subcategories of the producer price index (PPI). The concept is illustrated in Figure 1, below, (click to enlarge) where the difference between the overall PPI and that for crude petroleum is approximated by three linear trends. The most recent trend started in the beginning of 2010 and has been strengthening since then. Without loss of generality, we consider that the new developing trend will be a mirror reflection (opposite but equal slope) of the previous trend observed between 2002 and 20008. This is the long-term prediction for oil price with the PPI of crude at the level of 75 point in 2016.

Figure 2, below, (click to enlarge), presents the short term view elaborating on the most recent transition period from July 2008 to August 2009 and the details of the new trend. In March 2009, we presented two predictions. In (1) we presumed that, when reached the trend, the price would follow along it. Second prediction was based on a “dynamic overshoot” with oil price dropping much below the new trend, as shown by solid diamonds in Figure 2. From these two predictions, the first was right.

Figure 3, below, (click to enlarge) details our prediction made in June 2010 on the evolution of the oil price index between June and August 2010. We expected that the price would fall and the predicted curve rise above the trend, as shown by red circles.

This is a consequence of the fluctuation around the trend: the price can not be retained just on one side of the trend line. The measured price did not touch the trend line, however. So, our prediction was not fully right despite the fact that the price actually has fallen significantly. The August estimates of the producer price index for crude petroleum will be published in the middle of September. It will definitely show a decrease relative to July, but the price will not drop to per barrel.

Therefore, we foresee two possible scenarios: A more likely one supposes that the price in September will fall below per barrel and the measured difference (open circles) in Figure 3 will intercept the trend line. This scenario will be in line with our prediction of the S&P 500 level below 1000 in September.

We can not exclude that the price (and the S&P 500) will not drop in September cumulating more potential relative to the trends. This must happen in October-November and the potential drop will just increase in time as the deviation between the actual curve and the trend widens. The trend itself seems to be well-established already since the price has gone alongside the trend since August 2009. It might also happen that the true trend is different form the predicted one. It may have lower slope than during the previous period. Then the price will be decreasing at a lower rate into the second half of the 2000s. One can better estimate the trend slope in a couple of years, but before actual data are available we will retain our hypothesis on the slope value.

All in all, we expect the price index of crude petroleum to follow the new trend in the long run with short-term fluctuations of various amplitude and period.

Figure 1. Sustainable linear trends in the difference between the overall PPI and that for crude oil between 1987 and 2010. Currently, we observe the emergence of a new trend, which supposedly is a mirror reflection of the previous one.

Figure 2. The evolution of the difference between the overall (all commodities) PPI and that for crude oil.

Figure 3. The measured and predicted difference between the overall PPI and the index for crude petroleum.

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Energy Sector and Stocks Analysis from Seeking Alpha

Barron’s Spots a Gusher in Noble

admin — Mon, 06 Sep 2010 03:26:18 +0000

Ravi Nagarajan submits:

Barron’s has published a brief article (subscription required) making a bullish case for Noble Corporation (NE). Jay Palmer, writing for Barron’s, believes that Noble is well positioned for a world in which deepwater drilling will account for a growing share of production as China and other emerging countries continue to demand more oil. The article points out that Noble has a solid balance sheet and significant international operations that should mitigate the risk of further disruption in the Gulf of Mexico due to the federal moratorium put in place in response to the Deepwater Horizon disaster.

Here is a brief excerpt from the article:

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Energy Sector and Stocks Analysis from Seeking Alpha

A ‘Stealth Rally’ in Solar Stocks

admin — Sun, 05 Sep 2010 23:02:08 +0000

Dr. Duru submits:

OK, by “stealth” I really mean I have not paid close enough attention to the rallies in several solar stocks. 2010 has been a year of true divergence for solar stocks. Some solar stocks have been in year-to-date rallies and others have been declining all year. The net result is an awful -25% year-to-date performance for the Claymore/MAC global Solar Energy Index ETF (TAN). The winners are even more notable given the general stock market is down for the year. This year’s best performers are Renesola (SOL) and Solarfun (SOLF) which are well-ahead of the entire sector. LDK and Trina Solar (TSL) cling to small to marginal gains for the year after experiencing big losses earlier this year. First Solar (FSLR) rounds out the list with a flat performance year-to-date.

ReneSola (SOL)
I wrote about SOL several times last year as bullish options activity brought the stock to my attention. I completely lost track of SOL this year. Too bad. SOL has nearly doubled this year and is sitting at two-year highs. I cannot recall the last time I could say something like that about a solar stock!

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Energy Sector and Stocks Analysis from Seeking Alpha

Widening My Distance From BP

admin — Sun, 05 Sep 2010 18:38:04 +0000

Mike Stathis submits:

Two weeks ago, I made a brief post stating that I pulled out of BP and was going to stay clear (at least on the long side) because I had some pretty good indicators that told me shares were headed for a new low, below the dollar mark.

On Friday shares fell just below .

Other than a possible short-term bounce (which I would not try to play if I were you), I expect shares to continue further.

In short, even if you are an optimist, I don’t see shares moving up (at least trendwise) anytime soon. I can tell you that based on developments over the past 3 weeks I have some serious concerns which have clouded any amount of certainty I had previously.

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Energy Sector and Stocks Analysis from Seeking Alpha

MLPs Go Institutional – Quinn Kiley

admin — Sun, 05 Sep 2010 14:14:51 +0000

The Energy Report submits:

Fiduciary Asset Management Senior Portfolio Manager Quinn Kiley is a big believer in the MLP space and sees opportunities in closed-end funds and among individual MLPs. In this exclusive and candid interview with The Energy Report, Quinn discusses the state of the MLP asset class and suggests some names with catalysts for growth.

The Energy Report: Today we’re talking with Quinn Kiley, senior portfolio manager of Fiduciary Asset Management’s Master Limited Partnerships (MLPs) products. Tell us about FAMCO and what you do there.

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Energy Sector and Stocks Analysis from Seeking Alpha

Quick Idea: Cal Dive International

admin — Sun, 05 Sep 2010 09:49:35 +0000

Greenbackd submits:

Cal Dive International Inc. (NYSE:DVR) is an interesting play on the offshore oil and gas service industry. It was trading through a cyclical and seasonal low before the Macondo well blowout. The blowout has had a significant impact on the offshore oil and natural gas industry, and saw DVR suffer one of its worst quarters in several years. As a result, DVR’s stock price has recently dropped to a new 52-week low. With Earl and several other hurricanes bearing down on the US, and the offshore oil and gas industry close to long-term lows, DVR looks like a bargain to me.

About DVR

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Energy Sector and Stocks Analysis from Seeking Alpha

Cisco Takes Aim at Silver Spring With Arch Rock Purchase

admin — Sun, 05 Sep 2010 05:28:34 +0000

Greentech Media submits:

by Michael Kanellos

The brewing competition between Cisco (CSCO) and Silver Spring has just lost its subtlety.

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Energy Sector and Stocks Analysis from Seeking Alpha

PostRock Surges on White Deer Energy Investment

admin — Sun, 05 Sep 2010 01:01:33 +0000

Oil and natural gas company PostRock Energy (Nasdaq:PSTR) was up more than 70% on the Nasdaq yesterday on the announcement of a million equity investment in the company by energy-focused private equity firm White Deer Energy.

As part of the investment, PostRock’s debt will be reduced and its credit agreements restructured.

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Energy Sector and Stocks Analysis from Seeking Alpha

Big Q2 Earnings Out of Little China Sunergy – How Will Q3 Look?

admin — Sat, 04 Sep 2010 20:37:06 +0000

Investing Hobo submits:

China Sunergy (NASDAQ: CSUN) is the smallest of the US listed Chinese solar companies and currently only operates in cell production vertical. At face value, their Q2 earnings (see earnings call transcript here) were quite good. Revenues soared 107% year over year and 23% sequentially to 117m. Earnings were also up significantly as gross margins expanded to almost 20%. Earnings on a per share basis totaled .33 on a diluted EPS basis, compared to .18 EPS reported last year. Not bad for a four dollar stock if they can keep these levels of earnings stable over a longer period.

The advantage of operating in a single vertical is that during boom cycles, CSUN’s level of earnings can look extremely good as they leverage their lower cost structure to meet periods of high demand. The disadvantage of operating in a single vertical is that during down cycles, margins may compress because they don’t have direct control over end sales. CSUN will always rely on the ability of their customers who produce modules to do well. Higher integrated module producing peers have more direct control over costs as well as end demand exposure. As a result, even during down cycles, the level of their business doesn’t fluctuate as wildly as for CSUN. In recent years, CSUN’s quarterly earnings have swung from one extreme to another while some peers have kept their earnings more on a consistent level. The company is in the process of acquiring their sister module manufacturers CEEG (Nanjing and Shanghai), but has experienced delays in completing the merger. If and when this deal is closed, CSUN will operate more as a two vertical module manufacturer much like their larger peer Suntech Power.

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Energy Sector and Stocks Analysis from Seeking Alpha

Shorting Mariner Energy Following Thursday’s Explosion

admin — Sat, 04 Sep 2010 16:14:06 +0000

Benjamin Mackovak submits:

If we look at Mariner Energy (ME) in the vacuum of a purely stock trading perspective, and are able to temporarily put aside the tragic human and environmental ramifications that may result from the explosion at the Vermilion production platform yesterday, we see that a skewed risk/return profile exists which favors a short position in ME.

Earlier this year, ME agreed to a take-over by Apache Energy (APA) for cash and stock valued today at roughly .36 per share. However the tragedy at Vermilion could put that deal in jeopardy. Should the Apache take-over fall through I think it’s possible ME could trade down to per share.

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Energy Sector and Stocks Analysis from Seeking Alpha

3 Stocks to Green Up Your Portfolio

admin — Sat, 04 Sep 2010 11:48:48 +0000

StreetAuthority submits:

By David Sterman

Investing in clean energy takes a very strong stomach. Share prices in this sector continually soar and plunge depending on whether investors are feeling optimistic or pessimistic. Although the industry may never live up to the grandest hopes that some had expected, it is clearly emerging as a viable business with real profits and likely moderate long-term sales growth rates.

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Energy Sector and Stocks Analysis from Seeking Alpha

For Natural Gas, Range Resources Offers Margin of Safety

admin — Sat, 04 Sep 2010 07:25:21 +0000

SL Advisors submits:

Natural gas continues to disappoint the bulls, and is thereby providing some interesting value opportunities. While speculative long positions in natural gas futures have dropped to their lowest level of the year as traders are forced to abandon losing bets, some stocks are trading at an increasing discount to their intrinsic value.

One we’ve recently been buying is Range Resources (RRC). They have the biggest position in the Marcellus Shale, and having negotiated their leases earlier than most they paid less and obtained longer terms. As a result they produce natural gas at less than per MCF, and their production volume is growing at over 30% (though not revenues since gas prices have been falling).

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Energy Sector and Stocks Analysis from Seeking Alpha

Layne Christensen Increases Profits, But Energy Business Suffers

admin — Sat, 04 Sep 2010 03:00:29 +0000

Drilling and construction service provider Layne Christensen Company (Nasdaq:LAYN) has posted profits of .45 million, or .33 per diluted share for the second quarter of fiscal 2011, compared to a loss of .64 million or .45 per diluted share for the same period last year, on account of the strong performance in its mineral exploration business.

Excluding an after-tax non-cash impairment charge of .0 million, or .68 per share, net income for the second quarter in fiscal 2010 was .39 million, or .23 per share, which would still mean an increase of 47% in Q2 2011 profits.

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Energy Sector and Stocks Analysis from Seeking Alpha

ReneSola: Q2 Analysis

admin — Fri, 03 Sep 2010 22:36:59 +0000

Michael Lofing submits:

ReneSola (SOL) reported record revenues, earnings and solar product shipments during the second quarter 2010. During the global financial crisis at the end of 2008 and beginning of 2009, the company recorded inventory write-downs, impairments of investments and overall poor earnings. The first quarter of 2010 showed promise with improvements across the board, including positive operating cash flow and positive gross and net income margins; however, the company must show this is a trend and not just an anomaly.

Strong financial performance in the first six months of 2010 has improved many of the company’s rankings. Strong operating cash flows and less capital expenditures have the company ranked 5th on operating cash flow-to-net income and 2nd on free cash flow-to-net income. Significant improvements in two components of the cash conversion cycle has the company ranked 5th. Considerable debt relative to both equity and cash put the company at 31st in terms of debt-to-equity and 25th in terms of cash-to-debt. The company ranks 6th in research and development expenses as a percentage of revenues because the company has been investing significant amounts to improve its business.

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Energy Sector and Stocks Analysis from Seeking Alpha

PTRP: An ETF for Peak Oil Investing, Minus the Associated Risks and Moral Dilemmas

admin — Fri, 03 Sep 2010 18:12:08 +0000

Tom Konrad (AltEnergyStocks) submits:

I’ve been researching and writing this series about investments that will benefit from peak oil for half a year. If you’ve read the 20+ articles in the series so far, you’ve learned about several stocks that should be well positioned to benefit from rising oil prices, and you should also have a good idea about which sectors are best to avoid.

On the other hand, if you are just coming across my writing now, you’re about to learn about a single investment that should not only benefit from peak oil, but it will give you diversification at a fairly moderate cost.

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Energy Sector and Stocks Analysis from Seeking Alpha

Solar Sector Hot for a Reason

admin — Fri, 03 Sep 2010 15:43:06 +0000

James Shaw submits:

The solar sector has became one of the hottest sectors in the US stock market the last few months. This is especially true for most of the Chinese ADRs.

Several stocks are making new year highs, several are nearing their year highs, and several are breaking out of their recent resistance. Even the recent market meltdown cannot bring them down.

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Energy Sector and Stocks Analysis from Seeking Alpha

FuelCell CEO Discusses Q3 2010 Results – Earnings Call Transcript

admin — Fri, 03 Sep 2010 05:00:52 +0000

FuelCell Energy Inc. (FCEL)

Q3 2010 Earnings Call

September 2, 2010 10:00 AM ET

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Energy Sector and Stocks Analysis from Seeking Alpha

Thoughts on Oil Inventory, Natural Gas and Coal

admin — Fri, 03 Sep 2010 00:35:45 +0000

Zman submits:

Moratorium Watch: Last night, a federal judge gave Obama the stiff arm on the deep water drilling moratorium by refusing to dismiss the Hornbeck Offshore lawsuit. The Administration had wanted the suit, which dated from the time of Moratorium #1, to be dismissed after it replaced the drilling ban with Moratorium #2. The judge said the Moratoriums are not materially dissimilar and allowed the suit to proceed. Not that it helps the unemployed rig workers today but it should push the Administration to reconsider all types of drilling in the deep water Gulf of Mexico from being banned. Specifically this should play well for ATP (ATPG).

Commodity Watch: Crude oil rebounded .99 to close at .91 yesterday and was fairly unaffected by the EIA’s weekly report on inventories. In a nutshell the numbers were not too bad and a draw down on distillates was a welcome surprise (see details below). This morning crude is trading off slightly.

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Energy Sector and Stocks Analysis from Seeking Alpha

Canadian Solar Misses Estimate

admin — Thu, 02 Sep 2010 20:11:21 +0000

Zacks.com submits:

Canadian Solar Inc. (CSIQ) adjusted EPS of 7 cents in the second quarter of fiscal 2010 ending June 30, 2010, fell short of the Zacks Consensus Estimate of 15 cents and way behind the year-ago quarterly number of 49 cents. The downside came from a sharp rise in expenses, which offset higher shipments year over year. However on a sequential basis the company was able to improve its performance as compared to 3 cents in the first quarter of 2010.

Canadian Solar as of now is undergoing a review by the US Securities and Exchange Commission (SEC) into certain transactions identified in the subpoena issued to the company by the SEC. Earlier in June 2010 the company announced an investigation into the same by its internal audit committee which concluded that the transactions identified in the SEC subpoena were properly accounted in the company’s accounts.

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Energy Sector and Stocks Analysis from Seeking Alpha

Hedge Fund Harbinger Capital Adds to Crosstex Energy

admin — Thu, 02 Sep 2010 15:47:09 +0000

Market Folly submits:

Per a 13G filed with the SEC, Philip Falcone’s hedge fund Harbinger Capital Partners has updated its stake in Crosstex Energy (XTXI). Due to portfolio activity on August 17th, 2010, Harbinger has disclosed an 8.1% ownership stake in XTXI with 3,804,916 shares. This is a massive increase in their position because back on June 30th, they only owned 213,600 shares. As such, Harbinger has boosted its stake by over 1,681% in the past two months, adding 3,591,316 more shares.

Taken from Google Finance:

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Energy Sector and Stocks Analysis from Seeking Alpha

Israel’s Huge Oil and Gas Discovery

admin — Thu, 02 Sep 2010 11:23:26 +0000

Energy and Capital submits:

By Ian Cooper

While the Middle East may have a reputation for instability and occasional violence, there’s no denying the vast riches it has to offer patient investors.

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Energy Sector and Stocks Analysis from Seeking Alpha

Oil Inventories

admin — Thu, 02 Sep 2010 06:58:53 +0000

Hickey and Walters (Bespoke) submit:

With a build of over 3 million barrels in the latest week, oil inventories continue to swell. As shown in the chart, even though we are now in the period of the year when oil stockpiles typically decline, this year they are moving in the opposite direction. As a result, inventories are near their highest levels this year, and relative to average, are now higher than at any other point this year.

click to enlarge

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Energy Sector and Stocks Analysis from Seeking Alpha

How UNG Lost 23% in August

admin — Thu, 02 Sep 2010 02:36:00 +0000

Michael Johnston submits:

The United States Natural Gas Fund (UNG) is truly one-of-a-kind, not only as a commodity ETP but as an investment vehicle in general. Since its inception in April 2007, UNG has lost almost 90% of its value, steadily declining as natural gas prices tumbled and the nuances of a futures-based investment strategy ate into the asset base. That sort of track record would have killed a mutual fund long ago, and seemingly should have made investors think twice about natural gas as an investable asset. Yet UNG remains tremendously popular; total assets now stand at around .5 billion, and the average daily trading volume tops 20 million shares.

Even by UNG’s standards, August was an abysmal month. The fund lost about 23% of its value, or nearly 1% for every trading day during the month. For a commodity that is widely used in both industrial and residential applications–and one that seems likely to be a major component of the energy puzzle in the U.S.–such a steep drop in a relatively short period of time is difficult to fathom.

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Energy Sector and Stocks Analysis from Seeking Alpha

Back on the Radar: Chesapeake Energy

admin — Wed, 01 Sep 2010 22:11:01 +0000

The Manual of Ideas submits:

Chesapeake Energy (CHK) has for some time been synonymous with the vast untapped opportunity in U.S. onshore natural gas shale plays. As gas prices have remained depressed relative to oil prices longer than most expected, it appears many investors have slowly but surely given up on the company.

While the near-term outlook for natural gas remains unfavorable, the underlying value of Chesapeake’s assets and the lagging stock price have once again attracted considerable superinvestor interest. Famed oil and gas investor Boone Pickens more than doubled his fund’s stake in Chesapeake during the second quarter. Carl Icahn’s firm boosted its position from two million to nearly 13 million shares, while Mason Hawkins’s Southeastern Asset Management slightly added to its stake, which amounts to a considerable 12% of Chesapeake. Only David Winters’s mutual fund went against the grain, selling out of a relatively small position.

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Energy Sector and Stocks Analysis from Seeking Alpha

Weekly Oil Roundup: A Middling Crude Build

admin — Wed, 01 Sep 2010 17:47:13 +0000

Hard Assets Investor submits:

By Brad Zigler

US crude prices fell sharply on Tuesday, but ratcheted upward overnight ahead of the week’s US Energy Department inventory report release.

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Energy Sector and Stocks Analysis from Seeking Alpha

Petrobras Steps Forward for Biofuel

admin — Wed, 01 Sep 2010 13:23:37 +0000

Zacks.com submits:

While global oil giants have taken significant steps toward biofuel generation, Brazil’s state-owned energy company Petroleo Brasileiro S.A (PBR) or Petrobras S.A. is no exception. The company recently acquired 50% stake of Bioleo Industrial and Comercial, a local biodiesel company. The deal was made for a total consideration of 15.5 million Brazilian reals (.8 million). Petrobras made the purchase through its biofuels unit, Petrobras Biocombustivel.

Bioleo is situated in Feira de Santana, state of Bahia. The company has the capacity to process 130,000 tons of grains of several types of oilseeds. The unit also has a storage capacity for 30,000 tons of grain and tankage for 10 million liters of oil.

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Energy Sector and Stocks Analysis from Seeking Alpha

Renewable Auction Mechanism Could Power Solar ETFs, Stocks

admin — Wed, 01 Sep 2010 08:58:32 +0000

Kevin Grewal submits:

Recently, the State of California proposed a decision to adopt to a renewable auction mechanism (RAM) which enables rates to be set my market-pricing, which could lead to a new avenue of growth for ETFs like the Claymore/MAC Global Solar Energy Index (TAN), the Market Vectors Solar Energy ETF (KWT) and the Market Vectors Glb Alternative Energy ETF (GEX).

This proposed subsidy is expected to work as a feed-in-tariff, which will use market-rate pricing that is being set and driven by a bidding process, as opposed to utilizing rates that are being set and driven by the California Public Utilities Commission. A major goal of this new subsidy is to enable developers of solar power to furnish adequate returns and to soften the blow to rate payers which are being overburdened by excessive subsidies. If this can be achieved, it is expected that the solar industry will see a massive expansion.

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Energy Sector and Stocks Analysis from Seeking Alpha

Gas Pump Price ETF: Time for a Late-Summer Surge?

admin — Wed, 01 Sep 2010 04:33:41 +0000

Tom Lydon submits:

Summer is winding down. But before it can officially be called, we need to get through Labor Day weekend. In these savings-crazy times, will enough people hit the road to drive the gasoline ETF upward?

There’s no time like Labor Day to get behind the wheel, and low prices could be enough to get more drivers on the road and give the gas ETF a much-needed lift. Craig Schneider for AJC reports that there is actually good news at the gasoline pump this time around. The average metro Atlanta gas price is .53 a gallon, down 9 cents from a month ago and well below the national average of .67 a gallon, according to AAA.

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Energy Sector and Stocks Analysis from Seeking Alpha

Fuel-Thirsty China, The One Thing Investors Can Rely On

admin — Wed, 01 Sep 2010 00:09:51 +0000

Jim Trippon submits:

Green energy gets all the publicity these days. Even China, which has a reputation as the world’s biggest greenhouse gas emitter, is cracking down hard on energy usage.

Premier Wen Jiabao vows to use an "iron hand" to improve China’s energy efficiency. Beijing has just ordered more than 2,000 steel mills, cement plants and other energy-guzzling industries to shut down by September 30th. And Premier Wen means business this time.

The government has been trying for five years to enforce a plan to use 20 percent less energy per unit of economic output. But balky regional governments have frustrated Beijing by blocking every effort to close aging factories. Now, 2,000 factories will be barred from obtaining bank loans, business licenses, and even land.

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Energy Sector and Stocks Analysis from Seeking Alpha

As Summer Closes, We’re Loving the Shorts

admin — Tue, 31 Aug 2010 19:47:25 +0000

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Energy Sector and Stocks Analysis from Seeking Alpha

What the King of Natural Gas Forecasting Says About Future Prices

admin — Tue, 31 Aug 2010 15:21:12 +0000

First Energy analyst Martin King – whom I believe has called the natural gas market in North America better than anybody over the last two years – gave up on the likelihood of higher natural gas prices for the next 18 months in a report yesterday.

“Let us reiterate: placing money in the natural gas investment space, aside from special one-time circumstances, is likely to be dead on arrival” he wrote Monday morning. He lowered his forecast for prices in the US for 2010 by 40 cents per million BTU, and in 2011 by a full dollar per million BTU (Mmbtu).

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Energy Sector and Stocks Analysis from Seeking Alpha

Nabors: Oilfield Jack-of-All-Trades, Master of None?

admin — Tue, 31 Aug 2010 10:57:14 +0000

Doug Sheridan submits:
Nabors Industries (NBR) has seemingly forever been on the move; or at the very least, forever changing. The company’s recently announced acquisition of Superior Well Services (SWSI) — not to be confused with Superior Energy Services (SPN) — represents just one more juke in a decades-long string of strategic maneuvers by the company.

When this latest acquisition is complete, Nabors will own 530,000 horsepower of additional field equipment, most of which is currently used for hydraulic fracturing services in the Lower-48 US market. Superior also offers cementing, nitrogen injection, logging and perforation services. The transaction is expected to be financed with proceeds from the sale of Nabors’ interests in E&P assets in Columbia and British Columbia, as well as from the eventual IPO of the company’s NFR Energy joint venture.

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Energy Sector and Stocks Analysis from Seeking Alpha

Analyzing Suntech Power’s Q2 Results, After Impairments?

admin — Tue, 31 Aug 2010 06:33:45 +0000

Michael Lofing submits:
Suntech (STP) trades at 15 times forward earnings. Significant impairments have impacted last-12 months earnings per share. Impairment charges of 0 million were recorded in the second quarter of 2010. Operating results would be break even without Shunda Holdings impairments and the company’s exit from its trial production of thin film products. Strong performance at the gross margin level and capacity growth for the last three quarters is the driver behind investor confidence. High debt-to-equity ratio, and significant related party activities should be considered when reviewing Suntech’s valuation.

The company is in the middle of its peer group on a majority of the rankings. While the company is above average in operating cash flow-to-net income and free cash flow-to-net income, impairments impact on net income has improved this ratio. The company’s rank has dropped on a number of rankings due to the ramp up of new production. Conversely research and development costs have increased compared to peers improving the company’s ranking. The company ranks near the bottom on debt-to-equity. The company’s aggressive capital expansion has contributed to the high debt-to-equity.

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Energy Sector and Stocks Analysis from Seeking Alpha

Trade Idea: GMX Resources, Betting on Bond

admin — Tue, 31 Aug 2010 02:09:25 +0000

Colin Peterson submits:
GMX Resources Inc. (GMXR) is an natural gas exploration & production company with operations in the Haynesville shale play in Texas/Louisiana. Recent weakness in natural gas prices has hurt natural gas E&P company valuations. Here’s the company’s most recent investor presentation [pdf].

GMXR’s convertible notes trade at a higher yield than its straight preferred stock, indicating at least a capital structure arbitrage opportunity and possibly some undervalued debt for us to buy.

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Energy Sector and Stocks Analysis from Seeking Alpha

Ah … Contango Memories

admin — Mon, 30 Aug 2010 21:45:08 +0000

Hard Assets Investor submits:
By Brad Zigler

Real-time Monetary Inflation (last 12 months): -2.3%

The tango has long been known as the dance of love. Around the NYMEX trading ring, the ‘tango—the locals’ shorthand for contango—has as many lovers as detractors. Contango is the pricing phenomenon characterized by successively higher back-month prices. For example, a .98 contango was evident on Friday when October 2010 WTI crude oil finished at .17 a barrel, and January 2011 crude settled at .15.

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Energy Sector and Stocks Analysis from Seeking Alpha

MLPs Fared Well During August’s Sell-Off

admin — Mon, 30 Aug 2010 17:21:10 +0000

Avi Morris submits:
MLPs had a tough time in August, like the rest of the markets. The Alerian MLP Index began the month at 329 and reached its highest yearly close of 334 a few days later (needing just another 9 to set a new record). Since then, it pulled back to 322, still up 37 (13%) YTD with a yield of 6.8%. But a new record for the base index will have to wait. The comparable index with reinvested income was down only 1% in August and has risen 140 to 895 (19%) YTD into record territory.

One major development for MLPs was the oil spill from an Enbridge Energy (EEP) pipeline in late July near Marshall, Michigan (built in 1969). From its yearly high of 60, EEP sold off to 51, and then rebounded to the 54s at a time stock markets have been weak. Clean-up efforts are going well because the company has better management than BP (BP) and learned from mistakes made in the Gulf. EEP set up a website to report progress on the clean up.

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GT Solar: An Attractive Speculative Investment

admin — Mon, 30 Aug 2010 12:59:59 +0000

Ron Sommer submits:

GT Solar International, Inc. (Nasdaq: SOLR) is a provider of polysilicon production technology, and sapphire and silicon crystalline growth systems and materials for the solar, LED and other specialty markets. The Company’s principal products are:

Chemical vapor deposition (CVD) reactors and related equipment used to produce polysilicon, the key raw material used in silicon-based solar wafers and cells; and

Directional solidification systems (DSS) furnaces and related equipment used to cast multicrystalline ingots by melting and cooling polisilicon in a precisely controlled process. These ingots are used to make photovoltaic (PV) wafers which are, in turn, used to make solar cells.

GT Solar recently acquired the privately-held Crystal Systems, Inc. Crystal Systems is a crystalline growth technology company that manufactures large area sapphire substrates used in the LED, defense, medical and aerospace industries.

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12 Reasons It’s a Mistake to Short ATP Oil and Gas

admin — Mon, 30 Aug 2010 08:32:06 +0000

Devon Shire submits:
I just saw the most recent short interest on ATP Oil and Gas (ATP) which now amounts to over 21 million shares. With just over 50 million shares outstanding and 13% of those tied up by management we are looking at an incredibly high short interest.

Now usually seeing such a high short interest would give me pause. But I have been following this company extraordinarily closely for over 3 years, and to be honest, if there is an information edge here it is on my side.

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Energy Holdings of Billionaires

admin — Mon, 30 Aug 2010 04:07:51 +0000

Energy and Capital submits:
You know these guys, right?

That’s Buffett, Icahn, and Paulson — three of the most legendary investors in the game.

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Natural Gas Supply on the Rise

admin — Sun, 29 Aug 2010 23:43:58 +0000

Zacks.com submits:

The federal government’s Energy Information Administration (“EIA”) reported an in line increase in natural gas supplies, attributable to relatively warm temperatures in most regions that led to robust electric generation demand for the commodity.

Stockpiles held in underground storage in the lower 48 states rose by 40 billion cubic feet (Bcf) for the week ended August 20, 2010, within the forecasted range of 37 – 41 Bcf increase. The latest build compares with last year’s net injection of 53 Bcf and the 5-year (2005-2009) average of 59 Bcf for the reported week.

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Ensco’s Favorable Risk / Reward Tradeoff

admin — Sun, 29 Aug 2010 21:37:48 +0000

SL Advisors submits:
By Henry Hoffman

Ensco plc (ESV) is a global offshore driller, based in London, that has seen its shares pull back in stride with other offshore companies following the Macondo accident and recent decline in oil prices. Uniquely, Ensco takes a barbell approach, focusing almost exclusively of the high-end shallow water jackups and ultra-deepwater semisubmerisibles. Ensco has historically been a shallow water driller and is currently second in the high-end jackup space with 39 Jackups, comprising 11% of the global premium jackup fleet. High-end jackups are capable of drilling in deeper and more extreme conditions. ESV currently has 4 ultra deepwater rigs, and another 4 under construction. With a strategy of continually upgrading its jackup fleet, and recently entering the ultra-deepwater market, ESV has one of the youngest fleets among peers. Ensco’s story remains in the midst of a strategic change from a shallow water driller with half of its revenues in the GOM, to a global shallow and ultra-deepwater driller. Already, ESV’s GOM jackup exposure has been reduced to 20% of total jackup revenues.

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What’s Next for Natural Gas?

admin — Sat, 28 Aug 2010 21:18:44 +0000

Energy and Capital submits:
by Christian A. DeHaemer

We’re now at the time of year when kids start dreading going back to school, moms dream of free time during the day, and granddads pick a weekend to winterize the boat or shutter the cabin.

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A-Power Energy Misses With Zero Wind Turbine Biz, Reiterates 2010 Outlook

admin — Sat, 28 Aug 2010 16:55:58 +0000

Tate Dwinnell submits:
A-Power Energy (APWR) reported Q2 results Thursday morning and missed analyst estimates for both EPS and revenue. The company reported a non GAAP EPS of just .02 versus the analyst estimate of .14 on revenue of .8 million, vs the estimate of .22 million. While that’s good for an increase in revenue of 31% over the year ago quarter, EPS fell 85%.

On the bright side, the company is reiterating its full year guidance of 0 million in revenue and million in net profit (which I assume is a GAAP number)

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SunPower Upgraded by Two Sell-Side Firms; Shares Surge

admin — Sat, 28 Aug 2010 12:30:32 +0000

Tate Dwinnell submits:
Two firms are out this morning upgrading Sunpower (SPWRA) which has been crushed this year.

Soleil Securities upgraded from Hold to Buy.

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SunPower Rallies on Two Analyst Upgrades

admin — Sat, 28 Aug 2010 08:10:07 +0000

Wall Street Cheat Sheet submits:
By Elliot Turner

Soleil’s Princeton Tech Research and Raymond James are both out with upgrades on SunPower (SPWRA), citing the company’s present valuation metrics and strong growth outlook. Since reporting better than expected earnings and raising guidance on August 11, shares of SunPower have lost about 20%.

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Suntech Power: At a Crossroads After Q2 Results

admin — Sat, 28 Aug 2010 03:44:00 +0000

Investing Hobo submits:
Suntech Power (STP) reported their second quarter financials last week with results that need further review. At face value, they were horrible. US GAAP net loss totaled nearly 175 million, or 0.97 per share. This was primarily the result of charges related to a 101.1 million equity impairment of Shunda, a 25 million prepayment provision related to Shunda, and a 54.6 million write down in their thin film investments. Total charges for the quarter came in at 180.7 million. Without these charges, STP made 5.8 million on an operational basis, or 0.03 per share. Operational results were also large impacted by a large foreign exchange loss which totaled a net of 37.3 million. (See conference call transcript here.)

Outside of terrible headline numbers, key operational metrics did improve rather nicely. Shipments increased by 12% sequentially to what I estimate at around an industry leading 348mw. Revenues as a result hit 625 million for the second quarter, up almost 95% year over year. Processing costs also continued to decline, reaching .52/watt excluding freight and compensation costs. As a result, gross margin for their core module business stayed fairly stable at slightly above 20% despite asp declines due to a weaker euro exchange rate. Blended gross margin for total consolidated revenues were lower at 18.2% as a result of continued losses in their non-core businesses. In recent quarters, their non-core revenues ranged from 30-40 million and averaged negative margins in the mid to high teens percentile.

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Energy Sector and Stocks Analysis from Seeking Alpha