/* Article Data (Server Side) article (o): [object Object] WSODIssue (s): |46492|2534711|46565|41146|207365|99217|236635|205257|93903|79116|244667|79587 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Fadel Gheit: Lift Oil Export Ban, Free Domestic Profits and Defeat Russia! Link (s): http://folionation.squarespace.com/news/2014/5/16/fadel-gheit-lift-oil-export-ban-free-domestic-profits-and-de.html Thumbnail (s): DocumentDate_raw (n): 1400269680000 DocumentDate (s): May 16, 2014 DocumentDate_smart (s): May 16, 2014 DocumentKey (s): 1107-290734296785734819137-3H9OSH4NV0IOGHQ3KPRN5158BV ContentType (s): Article TrackingPixel (s): Content (s):

The oil export ban may not be achieving US objectives. Is it time to lift the ban?

Source: JT Long of The Energy Report  (5/15/14)

Oppenheimer & Co. Managing Director and Senior Energy Analyst Fadel Gheit knows how to thwart Russia's aggressive tendencies and encourage domestic oil and gas production: Lift the ban on oil exports. In the absence of a strategic U.S. energy policy, some companies will do better than others. In this interview with The Energy Reportconducted during earnings season, Gheit shares some of his insights on which companies have catalysts with bottom-line impacts.

The Energy Report : We recently interviewed Matt Badiali and he talked about what a boon the conflict in Ukraine has been for U.S. refineries. Are you seeing the same effect? What about opportunities in Europe as countries try to diversify away from dependence on Russian oil and gas?

Fadel Gheit: U.S. refiners benefit from the wide Brent/WTI discount. The Russian invasion of Ukraine has increased global tension, boosted Brent prices and widened the differential. With this cost advantage, U.S. refiners are able to significantly increase refined product exports, mainly to Latin America and Europe, which tightened U.S. supplies and boosted margins, despite flat demand.

Unfortunately, the U.S. does not have an energy policy, and we still have a ban on exporting crude oil, which has been in effect for 40 years. Even with the Russian invasion, we seem paralyzed, confused and unable to respond to Russia's aggression. Lifting the export ban and supplying Europe with oil and refined products would reduce dependence on Russian oil and lower global oil prices, which in turn would hurt Russian exports and boost the economies of the U.S. and Europe.

TER: In your last interview, you talked about the impact of instability in the Middle East on companies like Apache Corp. (APA). Do you see the situation stabilizing there? Are you more comfortable with companies operating in Egypt and Turkey?

FG: I believe the Middle East will remain volatile and unstable—not an attractive business environment. Apache sold 30% of its interests in Egypt to Sinopec, which is a step in the right direction. The sooner Apache exits Egypt and uses the proceeds to buy back stock, reduce debt and increase investment onshore in the U.S., the better off the shareholders will be. Why invest in Egypt or Turkey when you have the huge energy resources we have in the U.S.?

TER: You also said natural gas prices in North America are severely depressed compared to the rest of the world. You called that a good thing because it would result in a second industrial renaissance. Are you still bullish on the prospects for natural gas as an economic engine for the U.S.?

FG: Low natural gas prices are good for the consumer and drive U.S. manufacturing. But I also believe in free trade, and the U.S. government should allow LNG exports to higher-price markets, mainly in the Far East and Europe. If we had built large LNG export terminals, we could have significantly reduced Europe's dependence on Russian gas.

TER: What companies are benefitting from the fracking boom?

FG: Domestic oil and gas producers, as well as oil service companies. Infrastructure and transportation companies are also joining the party, despite regulatory hurdles.

TER: How are the large, integrated oil companies faring in the new energy environment? What catalysts are you watching during earnings season?

FG: The stocks of the large international oil companies have not performed well in the last 10 years, as they lagged all other energy sectors and the market in general. They are viewed as defensive investments, but offer no real growth. They have above-market dividend yield, but are not attractive enough for investors who favor the pure plays of refiners or oil and gas producers.

As far as individual company catalysts, Royal Dutch Shell's (RDS.ARDS.B) new CEO, Ben van Beurden, has increased the emphasis on profits, capital efficiency and returns. Lower CAPEX and increased divestments should reduce net investments. We expect Shell to generate free cash flow of over $20 billion ($20B) over the next two years. We think this is a good start and rate it a Perform.

We will be watching production growth, cost trends, capital spending and plans to return cash to shareholders in the form of dividends and share buybacks.

TER: What about the prospects for the large independent exploration and production (E&P) companies?

FG: The large E&P companies are more attractive than the integrated companies, less volatile than the refiners and more stable than the small producers. Each has a catalyst. Anadarko Petroleum Corp. (APC) benefited from a legal settlement, Apache benefited from restructuring, and so did Hess Corp. (HES) and Murphy Oil Corp. (MUR). EOG Resources Inc. (EOG) and Pioneer Natural Resources (PXD) benefited from oil production growth, while investors are waiting for the restructuring of Occidental Petroleum Corp. (OXY) to take place. Marathon Oil (MRO) and Devon Energy Corp. (DVN) have lagged, but offer the lowest valuations in the group. Cabot Oil & Gas Corp. (COG) and Range Resources Corp. (RRC) will continue to reflect natural gas prices and additional pipeline capacity, which have constrained production growth.

As I mentioned in a recent research report, with higher production growth than the majors, a higher dividend yield and a lower valuation than E&P peers, ConocoPhillips (COP) offers an alternative to both groups. We raised our 12-18 month price target to $85 from $80 to reflect an improving outlook on stronger financial and operating results and rated them outperform.

TER: Thank you for your time Fadel.

FG: Thank you.

Fadel Gheit , an energy analyst since 1986, is a managing director and senior analyst covering the oil and gas sector for Oppenheimer & Co. He has been named to The Wall Street Journal All-Star Annual Analyst Survey four times and was the top-ranked energy analyst on the Bloomberg Annual Analyst Survey for four years. He is frequently quoted on energy issues and has testified before Congress about oil price speculation.

Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE: 
1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None. 
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Royal Dutch Shell. Streetwise Reports does not accept stock in exchange for its services. 
3) Fadel Gheit: I own, or my family owns, shares of the following companies mentioned in this interview: Royal Dutch Shell Plc, Devon Energy Corp. and ConocoPhillips. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent. 
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

Streetwise – The Energy Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Participating companies provide the logos used in The Energy Report. These logos are trademarks and are the property of the individual companies.

 

101 Second St., Suite 110
Petaluma, CA 94952

 

Tel.: (707) 981-8204
Fax: (707) 981-8998
Email: jluther@streetwisereports.com

Click on the interactive chart to view data over time. 

 

1. Apache Corp. (APA, Earnings, Analysts, Financials): Operates as an independent energy company. Market cap at $33.65B, most recent closing price at $84.33.

 


2. Anadarko Petroleum Corporation (APC, Earnings, Analysts, Financials): Engages in the exploration and production of oil and gas properties primarily in the United States, the deepwater of the Gulf of Mexico, and Algeria. Market cap at $42.03B, most recent closing price at $83.39.

 


3. Hess Corporation (HES, Earnings, Analysts, Financials): Hess Corporation and its subsidiaries operate as an integrated energy company. Market cap at $27.23B, most recent closing price at $81.45.

 


4. Murphy Oil Corporation (MUR, Earnings, Analysts, Financials): Engages in the exploration and production of oil and gas properties worldwide. Market cap at $10.95B, most recent closing price at $59.13.

 


5. EOG Resources, Inc. (EOG, Earnings, Analysts, Financials): Engages in the exploration, development, production, and marketing of natural gas and crude oil primarily in the United States, Canada, the Republic of Trinidad, Tobago, the United Kingdom, and the People's Republic of China. Market cap at $48.79B, most recent closing price at $180.40.

 


6. Pioneer Natural Resources Co. (PXD, Earnings, Analysts, Financials): Engages in the exploration and production of oil and gas in the United States, South Africa, and Tunisia. Market cap at $26.99B, most recent closing price at $194.74.

 


7. Marathon Oil Corporation (MRO, Earnings, Analysts, Financials): Operates as an international energy company with operations in the United States, Canada, Africa, the Middle East, and Europe. Market cap at $23.96B, most recent closing price at $33.89.

 


8. Devon Energy Corporation (DVN, Earnings, Analysts, Financials): Engages in the acquisition, exploration, development, and production of natural gas and oil in the United States and Canada. Market cap at $25.88B, most recent closing price at $64.37.

 


9. Cabot Oil & Gas Corporation (COG, Earnings, Analysts, Financials): Engages in oil exploration, development, exploitation, and production. Market cap at $15.01B, most recent closing price at $35.65.

 


10. Range Resources Corporation (RRC, Earnings, Analysts, Financials): Engages in the acquisition, exploration, and development of natural gas properties primarily in the Appalachian and southwestern regions of the United States. Market cap at $14.05B, most recent closing price at $87.53.

 


11. ConocoPhillips (COP, Earnings, Analysts, Financials): Operates as an integrated energy company worldwide. Market cap at $81.95B, most recent closing price at $66.42.

 


Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

relatedData (o:Array(16)): 0 (o): [object Object] Headline (s): Springleaf Holdings (LEAF) Stock Gains Today on $4.25 Billion Purchase of ... Teaser (s): NEW YORK (TheStreet) -- Springleaf Holdings (LEAF - Get Report) shares are up 34.07% to $51 in early market trading on Monday after the company announced that it had reached an agreement to purchase OneMain Financial Holdings from Citigroup (C) ... Source (s): TheStreet.com DocumentDate (s): 12 minutes ago DocumentDate_raw (n): 1425394125000 Link (s): http://www.thestreet.com/story/13065277/1/springleaf-holdings-leaf-stock-gains-today-on-425-billion-purchase-of-citis-onemain-financial.html DocumentKey (s): HTTPwww.thestreet.com/story/13065277/1/springleaf-holdings-leaf-stock-gains-today-on-425-billion-purchase-of-citis-onemain-financial.html DMSourceID (s): Google ContentType (s): Article 1 (o): [object Object] Headline (s): Best Buy (BBY) Stock Up Today, Earnings Helped by Sale of High Margin Products Teaser (s): NEW YORK (TheStreet) -- Shares of Best Buy (BBY - Get Report) are up 2.25% to $39.50 in pre-market trading Tuesday, after the consumer electronics retailer posted better than expected profits for the fourth quarter. Source (s): TheStreet.com DocumentDate (s): 57 minutes ago DocumentDate_raw (n): 1425391425000 Link (s): http://www.thestreet.com/story/13065098/1/best-buy-bby-stock-up-today-earnings-helped-by-sales-of-higher-margin-products.html DocumentKey (s): HTTPwww.thestreet.com/story/13065098/1/best-buy-bby-stock-up-today-earnings-helped-by-sales-of-higher-margin-products.html DMSourceID (s): Google ContentType (s): Article 2 (o): [object Object] Headline (s): Navistar reports narrower first-quarter loss Teaser (s): Lisle-based Navistar International on Tuesday said it narrowed its first-quarter loss because of higher sales and lower warranty costs. Source (s): Chicago Tribune DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1425390750000 Link (s): http://www.chicagotribune.com/business/ct-navistar-earnings-0304-biz-20150303-story.html DocumentKey (s): HTTPwww.chicagotribune.com/business/ct-navistar-earnings-0304-biz-20150303-story.html DMSourceID (s): Google ContentType (s): Article 3 (o): [object Object] Headline (s): Canada Quarterly GDP Grew Faster Than Forecast on Inventories Teaser (s): (Bloomberg) -- Canada's economy grew faster than expected in the fourth quarter, as consumers boosted spending and businesses built up stockpiles of unsold goods. Source (s): Bloomberg DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1425389487000 Link (s): http://www.bloomberg.com/news/articles/2015-03-03/canada-quarterly-gdp-grew-faster-than-forecast-on-inventories DocumentKey (s): HTTPwww.bloomberg.com/news/articles/2015-03-03/canada-quarterly-gdp-grew-faster-than-forecast-on-inventories DMSourceID (s): Google ContentType (s): Article 4 (o): [object Object] Headline (s): Despite Oil Price Plunge, California Gasoline Prices Soar Teaser (s): This article was written by Oilprice.com , the leading provider of energy news in the world. Check out these other articles. How Much Crude Oil Do You Consume On A Daily Basis? Source (s): Nasdaq DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1425389400000 Link (s): http://www.nasdaq.com/article/despite-oil-price-plunge-california-gasoline-prices-soar-cm450211 DocumentKey (s): HTTPwww.nasdaq.com/article/despite-oil-price-plunge-california-gasoline-prices-soar-cm450211 DMSourceID (s): Google ContentType (s): Article 5 (o): [object Object] Headline (s): Stratos launches first 'connected' credit card on the market Teaser (s): It's something most people find annoying - bulging wallets filled with easily lost cards. One tech startup is hoping to make life a little easier for those whose pockets are overflowing with plastic. Source (s): Fox News DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1425388050000 Link (s): http://www.foxnews.com/tech/2015/03/03/stratos-launches-first-to-market-connected-credit-card/ DocumentKey (s): HTTPwww.foxnews.com/tech/2015/03/03/stratos-launches-first-to-market-connected-credit-card/ DMSourceID (s): Google ContentType (s): Article 6 (o): [object Object] Headline (s): Ford Sales Slide Surprises as GM, Nissan, Fiat Chrysler All Miss Teaser (s): Jeep sales rose 21 percent to 55,642, led by the Cherokee, Grand Cherokee and Wrangler. Photographer: Chris Ratcliffe/Bloomberg. Recommended. Source (s): Bloomberg DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1425387707000 Link (s): http://www.bloomberg.com/news/articles/2015-03-03/fiat-chrysler-misses-analysts-estimates-with-5-6-sales-growth DocumentKey (s): HTTPwww.bloomberg.com/news/articles/2015-03-03/fiat-chrysler-misses-analysts-estimates-with-5-6-sales-growth DMSourceID (s): Google ContentType (s): Article 7 (o): [object Object] Headline (s): BlackBerry Offers New Phones but Turns Focus to Software Teaser (s): BlackBerry may be launching four new smartphones over the coming year, but the struggling company is staking its future on becoming a giant in software. Source (s): ABC News DocumentDate (s): 3 hours ago DocumentDate_raw (n): 1425381346000 Link (s): http://abcnews.go.com/Technology/wireStory/blackberry-offer-phones-speeds-shift-software-29346919 DocumentKey (s): HTTPabcnews.go.com/Technology/wireStory/blackberry-offer-phones-speeds-shift-software-29346919 DMSourceID (s): Google ContentType (s): Article 8 (o): [object Object] Headline (s): U.S. Stocks Fall From Records Amid Slump in Autos, Health-Care Teaser (s): (Bloomberg) -- U.S. stocks retreated after the Nasdaq Composite Index closed above 5,000 for the first time in 15 years, as investors awaited jobs data and a policy meeting from the European Central Bank later this week. Source (s): Bloomberg DocumentDate (s): 4 hours ago DocumentDate_raw (n): 1425378120000 Link (s): http://www.bloomberg.com/news/articles/2015-03-03/u-s-stock-index-futures-little-changed-after-benchmark-records DocumentKey (s): HTTPwww.bloomberg.com/news/articles/2015-03-03/u-s-stock-index-futures-little-changed-after-benchmark-records DMSourceID (s): Google ContentType (s): Article 9 (o): [object Object] Headline (s): In biggest deal since Autonomy, HP to buy Wi-Fi gear maker Aruba Networks for ... Teaser (s): Hewlett-Packard Co said it would buy Wi-Fi network gear maker Aruba Networks Inc for about $2.7 billion, the biggest deal for the world's No. Source (s): Firstpost DocumentDate (s): 9 hours ago DocumentDate_raw (n): 1425359025000 Link (s): http://www.firstpost.com/business/biggest-deal-since-autonomy-hp-buy-wi-fi-gear-maker-aruba-networks-2-7-bn-2132659.html DocumentKey (s): HTTPwww.firstpost.com/business/biggest-deal-since-autonomy-hp-buy-wi-fi-gear-maker-aruba-networks-2-7-bn-2132659.html DMSourceID (s): Google ContentType (s): Article 10 (o): [object Object] WSODIssue (s): |89999|94102|261077|274387 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Dreamworks Animation flops Link (s): http://folionation.squarespace.com/news/2015/3/2/dreamworks-animation-flops.html Thumbnail (s): DocumentDate_raw (n): 1425332820000 DocumentDate (s): March 2, 2015 DocumentDate_smart (s): 17 hours ago DocumentKey (s): 1107-290734296785735253994-13J8QDLDODTHGG1SGH2HCJOQ0L ContentType (s): Article TrackingPixel (s): Teaser (s):

With dud movies, disappointing earnings and massive layoffs, is Dreamworks a bargain or just a bad investment?

Seeing that Disney (DIS) is trading 1.8 percent from its yearly high, while for Time Warner (TWX) the figure is 6 percent, one might assume that a fellow entertainment company like Dreamworks Animation (DWA) would follow the trend. 

It turns out that's not the case. In 2014, shares traded as high as $31.35, stabilizing between $22 and $24 as investors speculated the firm would be taken over. That did not happen, and now, in the wake of disappointing fourth quarter earnings, the company must prove it can survive.

In the fourth quarter, Dreamworks lost $0.75 per share on revenue of $234.24 million. The firm was hit by restructuring charges of $210.1 million. Movies like The Penguins of Madagascar and Mr. Peabody did poorly. Its restructuring plan resulted in a staff reduction of 500. The firm also sold its campus for $185 million to SunTrust Equity Funding (STI).

The issue

The core issue is that Dreamworks is spending too much on titles that are not guaranteed to be hits. By allowing the project budget to get out of control, Dreamworks let losses grow in 2014.

One bright spot was its revenue from Television Series and Specials, which grew 7.7 percent to $50.7 million. To boost liquidity for the short term, Dreamworks increased its revolving credit facility, from $400 million to $450 million.

Risks elevated

Restructuring is never a pretty thing for companies. For Dreamworks, the company will be running with fewer staff this year. While costs will fall, it still means the company needs to release movie titles that attract an audience.

Bottom line

Dreamworks looks like a bargain stock right now, but it is filled with risks. Rumors the firm will be bought out might buoy the stock. There are no other positive catalysts at this time, but if the firm releases a hit this year, profits, and its stock price, might improve. In the meantime, it’s probably better to avoid this company.

Written by Chris Lau.

Click on the interactive chart to view data over time. 

1. The Walt Disney Company (DIS, Earnings, Analysts, Financials): Operates as an entertainment company worldwide. Market cap at $176.89B, most recent closing price at $104.08.

 

 

2. DreamWorks Animation SKG Inc. (DWA, Earnings, Analysts, Financials): Engages in the development, production, and exploitation of animated feature films and characters worldwide. Market cap at $1.82B, most recent closing price at $21.41.

 

 

3. SunTrust Banks Inc. (STI, Earnings, Analysts, Financials): Operates as the holding company for SunTrust Bank, which provides various financial services to consumer and corporate customers in the United States. Market cap at $21.51B, most recent closing price at $41.0.

 

 

4. Time Warner Inc. (TWX, Earnings, Analysts, Financials): Operates as a media and entertainment company in the United States and internationally. Market cap at $68.11B, most recent closing price at $81.86.

 

(List compiled by Chris Lau. Monthly returns data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

 

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

 

 

 

11 (o): [object Object] WSODIssue (s): |39635|53729|64811|80411|93645|69598|9419497|136780|184972|26632167|109578|217004|223627|272133|285119 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Eiffel Tower addition puts wind energy in the spotlight Link (s): http://folionation.squarespace.com/news/2015/3/2/eiffel-tower-addition-puts-wind-energy-in-the-spotlight.html Thumbnail (s): DocumentDate_raw (n): 1425331200000 DocumentDate (s): March 2, 2015 DocumentDate_smart (s): 17 hours ago DocumentKey (s): 1107-290734296785735253916-4MHPMFEKSV51D0N5AAOVGLULN2 ContentType (s): Article TrackingPixel (s): Teaser (s):

From Paris to the Altamont Pass, wind energy is finally getting the attention it deserves.

Visitors to the Eiffel Tower may have noticed something different about the Paris icon in the past week, depending on where they were standing. Two 17-foot wind turbines were installed in the structure last week, and while they're visible from across the Seine, they can't be distinguished from the rest of the structure if you're standing at the bottom of the tower. 

Is Paris running on wind energy now? Not exactly, but 0.15 percent of the Eiffel Tower's energy consumption is now wind-generated, slightly offsetting the 6.7 GWh the structure consumes every year. No word yet on how long the turbines will take to counterbalance the energy used to haul them 400 feet into the air. 

So the installation is largely "symbolic," in the words of Jan Gromadzki, who oversaw the project for Urban Green Technology. But still, it brings our attention to an often-neglected source of renewable energy. Less disaster-prone than nuclear, less photogenic than solar, wind deserves its time in the limelight.

As it turns out, it might just be getting it. Google (GOOG) announced last month that it would enter into a 20-year power purchase agreement with NextEra Energy (NEE). As part of the agreement, nearly 800 old turbines in California's Altamont Pass, some of them from the 1980s, will be replaced with nearly 50 sleek, new, less bird-kill-y installations that will contribute to Google's 35 percent renewable energy mix.

A recent invention is also adding to the buzz around wind power. Altaeros Energies, a clean energy startup that came out of MIT in 2010, has developed a flying blimp-turbine called the BAT (Buoyant Airborne Technology). Since wind is stronger and more steady at higher altitudes, the reasoning goes, why not harvest its energy up there? A 2,000-foot-tall turbine is a daunting undertaking, but a power-producing balloon at the end of a 2,000-foot cable is much more manageable. The company has received $7 million in funding from SoftBank to pursue the project, which could provide energy for a limited number of households in rural areas or in the event of a natural disaster.

But should individual investors be as cavalier as Google and SoftBank when it comes to wind energy? The First Trust ISE Global Wind Energy Index Fund (FAN) has certainly had a rough 12 months, but that's largely due to sector-wide energy woes caused by low crude oil prices. Note the correlation with Exxon (XOM):

Wind energy investments are so tied into the wider energy sector partly because there are very few pure wind energy investments out there. BP (BP) and Shell (RDS.A) alone make up close to 4 percent of FAN's investments, for example. But even if pure wind plays are scarce, investors can still get in on the action. Below are 15 stocks from FAN's holdings

 

Click on the interactive chart to view data over time. 

 

1. The AES Corporation (AES, Earnings, Analysts, Financials): 1. The AES Corporation (AES): Operates as a power company in Latin America, Africa, North America, Europe, the Middle East, and Asia. Market cap at $9.25B, most recent closing price at $12.97.

 

 

2. Allegheny Technologies Inc. (ATI, Earnings, Analysts, Financials): 2. Allegheny Technologies Inc. (ATI): Produces and sells specialty metals worldwide. Market cap at $3.66B, most recent closing price at $33.66.

 

 

3. BP p.l.c. (BP, Earnings, Analysts, Financials): 3. BP p.l.c. (BP): Provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. Market cap at $126.03B, most recent closing price at $41.44.

 

 

4. Capstone Turbine Corp. (CPST, Earnings, Analysts, Financials): 4. Capstone Turbine Corp. (CPST): Develops, manufactures, markets, and services turbine generator sets and related parts for use in stationary distributed power generation applications. Market cap at $233.68M, most recent closing price at $0.71.

 

 

5. Duke Energy Corporation (DUK, Earnings, Analysts, Financials): 5. Duke Energy Corporation (DUK): Operates as an energy company in the Americas. Market cap at $55.53B, most recent closing price at $78.55.

 

 

6. Centrais Eletricas Brasileiras S.A. (EBR, Earnings, Analysts, Financials): 6. Centrais Eletricas Brasileiras S.A. - Eletrobras (EBR): Engages in the generation, distribution, transmission, and commercialization of electric power; and construction and operation of nuclear power plants in Brazil. Market cap at $2.58B, most recent closing price at $1.91.

 

 

7. Federal-Mogul Holdings Corporation (FDML, Earnings, Analysts, Financials): 7. Federal-Mogul Holdings Corporation (FDML): Federal-Mogul Corporation supplies powertrain and safety technologies worldwide. Market cap at $1.96B, most recent closing price at $13.07.

 

 

8. General Electric Company (GE, Earnings, Analysts, Financials): 8. General Electric Company (GE): Operates as a technology, service, and finance company worldwide. Market cap at $261.00B, most recent closing price at $25.99.

 

 

9. Alliant Energy Corporation (LNT, Earnings, Analysts, Financials): 9. Alliant Energy Corporation (LNT): Operates in electric and gas utility businesses in the United States. Market cap at $7.06B, most recent closing price at $63.60.

 

 

 

 

10. China Ming Yang Wind Power Group Limited (MY, Earnings, Analysts, Financials): 10. China Ming Yang Wind Power Group Limited (MY): Designs, manufactures, sells, and services megawatt-class wind turbines in China. Market cap at $263.44M, most recent closing price at $2.15.

 

 

11. NextEra Energy Inc. (NEE, Earnings, Analysts, Financials): 11. NextEra Energy Inc. (NEE): Engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. Market cap at $45.97B, most recent closing price at $103.46.

 

 

12. NRG Energy Inc. (NRG, Earnings, Analysts, Financials): 12. NRG Energy Inc. (NRG): Operates as a wholesale power generation company. Market cap at $8.11B, most recent closing price at $23.98.

 

 

13. Otter Tail Corporation (OTTR, Earnings, Analysts, Financials): 13. Otter Tail Corporation (OTTR): Engages in electric and nonelectric operations in the United States and internationally. Market cap at $1.20B, most recent closing price at $32.72.

 

 

14. Trinity Industries Inc. (TRN, Earnings, Analysts, Financials): 14. Trinity Industries Inc. (TRN): Provides products and services to the industrial, energy, transportation, and construction sectors primarily in the United States, Canada, Mexico, the United Kingdom, Singapore, and Sweden. Market cap at $5.23B, most recent closing price at $33.62.

 

 

15. Woodward Inc. (WWD, Earnings, Analysts, Financials): 15. Woodward Inc. (WWD): Engages in the design, manufacture, and servicing of energy control and optimization solutions for commercial and military aircraft and ground vehicles, turbines, reciprocating engines, and electrical power system equipment worldwide. Market cap at $3.16B, most recent closing price at $48.55.

 

(List compiled by David Floyd. Monthly returns data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member. 

12 (o): [object Object] WSODIssue (s): |21167557|54046|70925|245813 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Nasdaq breaks 5000: is a new high on the horizon? Link (s): http://folionation.squarespace.com/news/2015/3/2/nasdaq-breaks-5000-is-a-new-high-on-the-horizon.html Thumbnail (s): DocumentDate_raw (n): 1425329040000 DocumentDate (s): March 2, 2015 DocumentDate_smart (s): 18 hours ago DocumentKey (s): 1107-290734296785735253842-2KDHV2ITCP7LCU4DS05563VF88 ContentType (s): Article TrackingPixel (s): Teaser (s):

It took 15 years, but the Nasdaq broke 5000 today. To celebrate, here are 4 stocks that are marching upwards.

Turns out that Mondays aren't always bad. The Nasdaq Composite Index (.IXIC) hit 5000.33 Monday morning, marking the index's first above-5000 performance since March 2000. Less than an hour later, the index was back in sub-5000 territory, but the glimpse at a 5000-plus Nasdaq has many people excited. An investment advisor even told USA Today, "We're certainly not in bubble territory."

Wall Street is in the middle of a serious bull market: in fact, at six years, it's actually one of the longest bulls on record. Monday morning's milestone comes on the heels of the Nasdaq's 10-day winning streak in February, which the Wall Street Journal's MoneyBeat blog points out is the index's longest since July 2009.

Over at Barron's, there's talk of the Nasdaq's pricing being fairly reasonable—with a price/earnings (P/E) ratio of 21—and strong balance sheets that can help keep the Nasdaq over 5000. 

CNBC is grounding the conversation with a healthy dose of reality. Peter Boockvar, chief market analyst at The Lindsey Group, noted that the Nasdaq would have to reach 6900 for it to actually reach its inflation-adjusted high. So the 5000 that everyone's excited about is more 

The Nasdaq still has a way to go before it can beat its record close 5048.62 and intra-day high of 5131.52. Nevertheless, the index's long and steady climb to 5000 inspired the following screen.

Below is a list of stocks that, as of 2:45 PM EST, have passed their 52-week highs and still have positive momentum as indicated by their 50-day simple moving averages (SMA) beating their 200-day SMAs. An SMA is a stock's average price over a specific period, for example 50 days or 200 days, and when a stock's short-term SMA exceeds its long-term SMA, it shows that the stock has strong upward potential. This means that these stocks, which have already reached new 52-week highs, could rise further. 

And in the spirit of fair and reasonable pricing, the listed stocks all have a price to earnings growth (PEG) ratio below 1. This valuation ratio factors in expected growth and is calculated by dividing a stock's P/E ratio by its annual earnings per share (EPS) growth. When a stock's PEG is under 1, it may be considered undervalued. 

Click on the interactive chart to view data over time. 

 

1. Apollo Commercial Real Estate Finance Inc. (ARI, Earnings, Analysts, Financials): Operates as a commercial real estate finance company in the United States. Market cap at $800.67M, most recent closing price at $17.09. 

The stock is trading 0.46% above its 52-week high. It is also trading 4.09% above its 50-day SMA of 16.69 and 6.56% above its 200-day SMA of 16.52.

Performance year-to-date at -23.00%.

PEG at 0.91.

Apollo Commercial Real Estate Finance trades on the New York Stock Exchange. 

 

2. Astronics Corporation (ATRO, Earnings, Analysts, Financials): Designs and manufactures products for the aerospace and defense industries worldwide. Market cap at $1.52B, most recent closing price at $69.56. 

The stock is trading 1.38% above its 52-week high. It is also trading 28.47% above its 50-day SMA of 57.16 and 42.12% above its 200-day SMA of 51.81.

Performance year-to-date at 66.40%.

PEG at 0.69.

Astronics Corporation trades on the Nasdaq Composite Index.

 

3. Cambrex Corporation (CBM, Earnings, Analysts, Financials): Provides products and services for the development and commercialization of new and generic therapeutics. Market cap at $1.07B, most recent closing price at $34.25. 

The stock is trading 0.57% above its 52-week high. It is also trading 37.59% above its 50-day SMA of 27.17 and 57.44% above its 200-day SMA of 22.71.

Performance year-to-date at 87.80%.

PEG at 0.89.

Cambrex Corporation trades on the New York Stock Exchange. 

 

4. Riverview Bancorp Inc. (RVSB, Earnings, Analysts, Financials): Operates as the holding company for Riverview Community Bank that provides commercial and business banking products and services in Washington and Oregon. Market cap at $101.12M, most recent closing price at $4.50. 

The stock is trading 3.47% above its 52-week high. It is also trading 1.40% above its 50-day SMA of 4.42 and 11.23% above its 200-day SMA of 4.14.

Performance year-to-date at 625.00%.

PEG at 0.43.

Riverview Bancorp trades on the Nasdaq Composite Index. 

 

(List compiled by Mary-Lynn Cesar. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

13 (o): [object Object] WSODIssue (s): |6123342|24812378 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): China's electric vehicle market: Kandi and Tesla Link (s): http://folionation.squarespace.com/news/2015/2/27/chinas-electric-vehicle-market-kandi-and-tesla.html Thumbnail (s): DocumentDate_raw (n): 1425055080000 DocumentDate (s): February 27, 2015 DocumentDate_smart (s): Feb 27, 2015 DocumentKey (s): 1107-290734296785735248649-0O9B14AHKGJNVMK6ESIFTBFQFF ContentType (s): Article TrackingPixel (s): Teaser (s):

Kandi electric vehicles are selling like hot cakes in China. Meanwhile Tesla hits a wall.

Value investors should pay attention when stocks fall steadily from previous highs. Kandi Technologies (KNDI) is a perfect example. Share prices peaked on July 22 at $22.49 and bottomed out on December 16, at a 52-week low of $10.30. Since then, the vehicle maker’s stock has rebounded slowly, the primary reason being that the SEC has closed its investigation into the company.

Kandi is a pure electric vehicle maker that runs a joint venture car-share program in China. The company reported sales of $44.21 million for the quarter ending September 30 and announced in December that it delivered 700 EVs to a distributor in Guangzhou. Altogether, the firm delivered 14,398 units in 2014.

Kandis’ success is in stark contrast to Tesla’s (TSLA) troubles in China. Forbes has called the company’s venture into the Chinese market a “flop,” noting that Tesla China imported just 444 units in December, a sharp drop from 747 the previous month. June Jin, Tesla China’s Vice President of Communications, left the company after less than a year on the job, and CEO Elon Musk has threatened further layoffs.

For the last year, Tesla and Kandi’s stocks are performing roughly the same, but this could change soon. Car-sharing is rapidly becoming an established trend in China, and the government has extended subsidies for electric vehicles to 2020, which may stimulate demand for domestic EV manufacturers.

In terms of valuation, Kandi is much more appealing than Tesla. The stock trades at 3.1 times book, compared to 27.1 for Tesla. Kandi’s debt to equity ratio is 0.23, compared to 2.51 for Tesla.

On the other hand, judging by its stock price, Tesla’s branding value is enormous. Founder Elon Musk is confident the firm could be worth as much as Apple by 2025. In the U.S., where Tesla has enjoyed strong demand, mass adoption will ultimately depend on the availability of superchargers.

Bottom line

Neither Tesla nor Kandi’s stock is without risk. Tesla’s valuation is scary, but the firm is expecting better sales for its flagship Model S. Kandi’s business may now be beyond the concerns of the SEC, but renewed worries may emerge. The latter scenario is likely: the short float on Kandi’s stock is 25.50 percent.

Written by Chris Lau.

 

Click on the interactive chart to view data over time. 

 

1. Kandi Technologies Group Inc. (KNDI, Earnings, Analysts, Financials): Engages in the design, development, manufacture, and commercialization of off-road vehicles, motorcycles, mini-cars, and special automobile related products. Market cap at $640.05M, most recent closing price at $13.83.

 

 

2. Tesla Motors Inc. (TSLA, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle powertrain components. Market cap at $25.98B, most recent closing price at $207.19.

 

(List compiled by Chris Lau. Monthly returns data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

 

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

 

 

 

14 (o): [object Object] WSODIssue (s): |36276|242250|72887506|248333 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): BlackBerry could see a boost in device sales Link (s): http://folionation.squarespace.com/news/2015/2/26/blackberry-could-see-a-boost-in-device-sales.html Thumbnail (s): DocumentDate_raw (n): 1424971140000 DocumentDate (s): February 26, 2015 DocumentDate_smart (s): Feb 26, 2015 DocumentKey (s): 1107-290734296785735247251-5VVCNAC16V9VKP1EONLHOI651O ContentType (s): Article TrackingPixel (s): Teaser (s):

 AT&T is offering BlackBerry's Classic and Passport devices on its site and in retail stores.

Unless you're Xiaomi or OnePlus, selling smartphones through a direct to consumer (DTC) model is unheard of. This is what BlackBerry (BBRY) was doing in the US until February 20, when its flagship Passport and Classic devices became available on AT&T's (T) website and at retail stores. This move could help BlackBerry boost device sales.

Custom design

BlackBerry has customized the Passport for the AT&T network, adding rounded edges, for example. AT&T is also making the Classic available at a much lower cost. Consumers may choose either the Passport, at $200 with a two-year contract, or the Classic, at $50 with a two-year contract.

Challenges ahead

AT&T's support for BlackBerry is interesting, given that the company is not even in the top five smartphone makers in terms of US market share. Xiaomi, Lenovo, ZTE, and Huawei all make smartphones that cost significantly less for consumers than the Passport or the Classic. At a $200 price point, the Passport will have a hard time competing with Apple's (APPL) iPhone or devices running Google's (GOOG) Android OS. Yet the Passport has a physical keyboard, a decent camera sensor and a massive battery. In short, the device should still interest business users who prefer a keyboard for input.

Bottom line

While BlackBerry sales are unlikely to skyrocket as AT&T offers Classic and Passport devices, it could still be a positive development for a firm in the midst of a turnaround. The stock is still hovering around $10 for now, and acceleration in revenue growth will take several quarters.

Written by Chris Lau.

Disclosure: The author owns a long position in BlackBerry.

Click on the interactive chart to view data over time. 

1. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $750.17B, most recent closing price at $128.79.

 

 

2. BlackBerry Limited (BBRY, Earnings, Analysts, Financials): Offers BlackBerry wireless communications platform solution, which includes the sale of BlackBerry handheld devices; and the provision of data communication, and compression and security infrastructure services enabling BlackBerry handheld wireless devices to send and receive wireless messages and data. Market cap at $5.56B, most recent closing price at $10.51.

 

 

3. Google Inc. (GOOG, Earnings, Analysts, Financials): Google is the world's most popular search engine. Market cap at $370.17B, most recent closing price at $543.87.

 

 

4. AT&T Inc. (T, Earnings, Analysts, Financials): Provides telecommunication services to consumers, businesses, and other service providers worldwide. Market cap at $177.45B, most recent closing price at $34.21.

 

(List compiled by Chris Lau. Monthly returns data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

 

 

 

15 (o): [object Object] WSODIssue (s): |5694821|183704|50801295|40546234|4118275 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Is it time to lift the ban on crude oil exports? Link (s): http://folionation.squarespace.com/news/2015/2/25/is-it-time-to-lift-the-ban-on-crude-oil-exports.html Thumbnail (s): DocumentDate_raw (n): 1424894160000 DocumentDate (s): February 25, 2015 DocumentDate_smart (s): Feb 25, 2015 DocumentKey (s): 1107-290734296785735245972-55IELRPI98SQVF5FDD7AIGM356 ContentType (s): Article TrackingPixel (s): Teaser (s):

Falling oil prices hurt oil companies, especially ones that frack. Would lifting the crude oil export ban help?

It seemed to make sense at the time.

US field production of crude oil peaked at just under 3.52 billion barrels in 1970. In January 1973, currency shocks and Nixon’s resignation sent global stock markets tumbling. Then on October 6, Egypt and Syria sparked the Yom Kippur War with Israel, putting nuclear powers on alert and throwing global energy markets into conniptions. OPEC cut production and raised prices, and the Arab Oil Embargo was underway.

The price of a barrel quadrupled. Angry lines formed outside of gas stations across the US. In an effort to maintain supply, Gerald Ford signed a ban on most crude oil exports into law in December 22, 1975.

Why lift the ban?

The law stands, but a growing chorus is calling for it to be lifted. The logic is worth considering.

First, as The Economist reports, the US already exports a number of hydrocarbons, including liquefied petroleum gas (LPG), natural gas liquids (NGL) and liquefied natural gas (LNG). The US is the world’s largest exporter of diesel, kerosene and gasoline: as refined products, these are legal to export, but the definition of “refined” is so broad that stabilized crude—the kind that’s safe to transport via pipeline—counts. Some companies have obtained licenses to export entirely unrefined crude oil, so far only to Canada but perhaps soon to Mexico as well.

Second, the ban has hampered the efficiency of the US economy. As the Council on Foreign Relations’ Blake Clayton writes, mismatches between crude oil quality and the locally available refining and transportation capabilities mean that “producers are forced to choose between leaving oil in the ground and pumping it at depressed prices.”

Who benefits?

The counterargument is the same as it was in 1975. Since the US remains a net importer of crude oil, exporting it is bad math. As Clayton notes, though, the relationship between commodity prices and trade isn’t just an issue of addition and subtraction. Inefficiencies along the supply chain may have more of an effect on prices than anything else.

Some suspect that shadowy industry interests are at work: companies want to export crude oil in order to pad thinning margins, and American consumers will suffer at the pump. The first argument is undoubtedly true. But lifting the export ban might actually lower gasoline prices, since, as Jason Bordoff, director of Columbia University’s Center on Global Energy Policy, told NPR, “the price consumers are paying for gasoline is being set by the world price of oil, not by the US price.” In any event, the US already exports gasoline—more than any other country.

There are clashing interests at work, of course. Environmentalists support the ban, predictably, but so do independent refiners, whom the status quo makes the gatekeepers of US oil exports: they turn unexportable crude into exportable petroleum products.

The frackers

The ban falls hardest on the frackers. This is ironic, since the “shale revolution” is largely responsible for the supply glut that led to low oil prices in the first place. They are in part victims of their own success.

The Market Vectors Unconventional Oil & Gas ETF (FRAK) is down 19.4% for the year:

Some of the ETF’s holdings have fared far worse. Five—counting Linn Energy LLC (LINE) and LinnCo (LNCO) as one—are down 50% or more for the year.

Two of these companies, Breitburn Energy Partners LP (BBEP) and Linn Energy, have cut dividends in order to save cash, reports The Wall Street Journal. Linn, which was drawing on credit to pay shareholders even before oil prices fell, has also cut capital spending by half.

Another of these badly hurting companies, EXCO Resources (XCO), suspended its dividend in December.

Oasis Petroleum (OAS), which is down nearly 60% for the year, announced in December that it would cut capital spending and it would transition to operating six rigs by the end of March, down from 16 in September.

If the ban were lifted, local refineries would have less control over what projects are economical to pursue, and business could increase for ailing frackers. Despite the global supply glut, the latter might find markets for export—perhaps beyond Canada and Mexico—which are currently dominated by the industry giants.

Of course, just as an add-and-subtract approach to assessing the export ban is simplistic, a more-demand-more-money analysis might also being misleading. Many companies have heavily hedged their production for next year. In November, the CEO of Laredo Petroleum (LPI), another severe drag on FRAK’s performance, stated that the company had hedged 60% and 90% of its expected 2015 gas and oil production, respectively.

The new normal

Of course, few will carry on the argument if oil returns to breakeven levels. The International Energy Agency thinks all of these spending cuts might alleviate the supply glut. While the new normal may not be $80-100 per barrel, it’s unlikely those crying out about a $40 future will be vindicated this decade.

*/ Fadel Gheit: Lift Oil Export Ban, Free Domestic Profits and Defeat Russia!

Fadel Gheit: Lift Oil Export Ban, Free Domestic Profits and Defeat Russia!

The oil export ban may not be achieving US objectives. Is it time to lift the ban?

Source: JT Long of The Energy Report  (5/15/14)

Oppenheimer & Co. Managing Director and Senior Energy Analyst Fadel Gheit knows how to thwart Russia's aggressive tendencies and encourage domestic oil and gas production: Lift the ban on oil exports. In the absence of a strategic U.S. energy policy, some companies will do better than others. In this interview with The Energy Report, conducted during earnings season, Gheit shares some of his insights on which companies have catalysts with bottom-line impacts.

The Energy Report : We recently interviewed Matt Badiali and he talked about what a boon the conflict in Ukraine has been for U.S. refineries. Are you seeing the same effect? What about opportunities in Europe as countries try to diversify away from dependence on Russian oil and gas?

Fadel Gheit: U.S. refiners benefit from the wide Brent/WTI discount. The Russian invasion of Ukraine has increased global tension, boosted Brent prices and widened the differential. With this cost advantage, U.S. refiners are able to significantly increase refined product exports, mainly to Latin America and Europe, which tightened U.S. supplies and boosted margins, despite flat demand.

Unfortunately, the U.S. does not have an energy policy, and we still have a ban on exporting crude oil, which has been in effect for 40 years. Even with the Russian invasion, we seem paralyzed, confused and unable to respond to Russia's aggression. Lifting the export ban and supplying Europe with oil and refined products would reduce dependence on Russian oil and lower global oil prices, which in turn would hurt Russian exports and boost the economies of the U.S. and Europe.

TER: In your last interview, you talked about the impact of instability in the Middle East on companies like Apache Corp. (APA). Do you see the situation stabilizing there? Are you more comfortable with companies operating in Egypt and Turkey?

FG: I believe the Middle East will remain volatile and unstable—not an attractive business environment. Apache sold 30% of its interests in Egypt to Sinopec, which is a step in the right direction. The sooner Apache exits Egypt and uses the proceeds to buy back stock, reduce debt and increase investment onshore in the U.S., the better off the shareholders will be. Why invest in Egypt or Turkey when you have the huge energy resources we have in the U.S.?

TER: You also said natural gas prices in North America are severely depressed compared to the rest of the world. You called that a good thing because it would result in a second industrial renaissance. Are you still bullish on the prospects for natural gas as an economic engine for the U.S.?

FG: Low natural gas prices are good for the consumer and drive U.S. manufacturing. But I also believe in free trade, and the U.S. government should allow LNG exports to higher-price markets, mainly in the Far East and Europe. If we had built large LNG export terminals, we could have significantly reduced Europe's dependence on Russian gas.

TER: What companies are benefitting from the fracking boom?

FG: Domestic oil and gas producers, as well as oil service companies. Infrastructure and transportation companies are also joining the party, despite regulatory hurdles.

TER: How are the large, integrated oil companies faring in the new energy environment? What catalysts are you watching during earnings season?

FG: The stocks of the large international oil companies have not performed well in the last 10 years, as they lagged all other energy sectors and the market in general. They are viewed as defensive investments, but offer no real growth. They have above-market dividend yield, but are not attractive enough for investors who favor the pure plays of refiners or oil and gas producers.

As far as individual company catalysts, Royal Dutch Shell's (RDS.A; RDS.B) new CEO, Ben van Beurden, has increased the emphasis on profits, capital efficiency and returns. Lower CAPEX and increased divestments should reduce net investments. We expect Shell to generate free cash flow of over $20 billion ($20B) over the next two years. We think this is a good start and rate it a Perform.

We will be watching production growth, cost trends, capital spending and plans to return cash to shareholders in the form of dividends and share buybacks.

TER: What about the prospects for the large independent exploration and production (E&P) companies?

FG: The large E&P companies are more attractive than the integrated companies, less volatile than the refiners and more stable than the small producers. Each has a catalyst. Anadarko Petroleum Corp. (APC) benefited from a legal settlement, Apache benefited from restructuring, and so did Hess Corp. (HES) and Murphy Oil Corp. (MUR). EOG Resources Inc. (EOG) and Pioneer Natural Resources (PXD) benefited from oil production growth, while investors are waiting for the restructuring of Occidental Petroleum Corp. (OXY) to take place. Marathon Oil (MRO) and Devon Energy Corp. (DVN) have lagged, but offer the lowest valuations in the group. Cabot Oil & Gas Corp. (COG) and Range Resources Corp. (RRC) will continue to reflect natural gas prices and additional pipeline capacity, which have constrained production growth.

As I mentioned in a recent research report, with higher production growth than the majors, a higher dividend yield and a lower valuation than E&P peers, ConocoPhillips (COP) offers an alternative to both groups. We raised our 12-18 month price target to $85 from $80 to reflect an improving outlook on stronger financial and operating results and rated them outperform.

TER: Thank you for your time Fadel.

FG: Thank you.

Fadel Gheit , an energy analyst since 1986, is a managing director and senior analyst covering the oil and gas sector for Oppenheimer & Co. He has been named to The Wall Street Journal All-Star Annual Analyst Survey four times and was the top-ranked energy analyst on the Bloomberg Annual Analyst Survey for four years. He is frequently quoted on energy issues and has testified before Congress about oil price speculation.

Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE: 1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None. 2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Royal Dutch Shell. Streetwise Reports does not accept stock in exchange for its services. 3) Fadel Gheit: I own, or my family owns, shares of the following companies mentioned in this interview: Royal Dutch Shell Plc, Devon Energy Corp. and ConocoPhillips. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent. 5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. 6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

Streetwise – The Energy Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Participating companies provide the logos used in The Energy Report. These logos are trademarks and are the property of the individual companies.

 

101 Second St., Suite 110Petaluma, CA 94952

 

Tel.: (707) 981-8204Fax: (707) 981-8998Email: jluther@streetwisereports.com

Click on the interactive chart to view data over time. 

<p>Your browser does not support iframes.</p>

 

1. Apache Corp. (APA, Earnings, Analysts, Financials): Operates as an independent energy company. Market cap at $33.65B, most recent closing price at $84.33.

 

2. Anadarko Petroleum Corporation (APC, Earnings, Analysts, Financials): Engages in the exploration and production of oil and gas properties primarily in the United States, the deepwater of the Gulf of Mexico, and Algeria. Market cap at $42.03B, most recent closing price at $83.39.

 

3. Hess Corporation (HES, Earnings, Analysts, Financials): Hess Corporation and its subsidiaries operate as an integrated energy company. Market cap at $27.23B, most recent closing price at $81.45.

 

4. Murphy Oil Corporation (MUR, Earnings, Analysts, Financials): Engages in the exploration and production of oil and gas properties worldwide. Market cap at $10.95B, most recent closing price at $59.13.

 

5. EOG Resources, Inc. (EOG, Earnings, Analysts, Financials): Engages in the exploration, development, production, and marketing of natural gas and crude oil primarily in the United States, Canada, the Republic of Trinidad, Tobago, the United Kingdom, and the People's Republic of China. Market cap at $48.79B, most recent closing price at $180.40.

 

6. Pioneer Natural Resources Co. (PXD, Earnings, Analysts, Financials): Engages in the exploration and production of oil and gas in the United States, South Africa, and Tunisia. Market cap at $26.99B, most recent closing price at $194.74.

 

7. Marathon Oil Corporation (MRO, Earnings, Analysts, Financials): Operates as an international energy company with operations in the United States, Canada, Africa, the Middle East, and Europe. Market cap at $23.96B, most recent closing price at $33.89.

 

8. Devon Energy Corporation (DVN, Earnings, Analysts, Financials): Engages in the acquisition, exploration, development, and production of natural gas and oil in the United States and Canada. Market cap at $25.88B, most recent closing price at $64.37.

 

9. Cabot Oil & Gas Corporation (COG, Earnings, Analysts, Financials): Engages in oil exploration, development, exploitation, and production. Market cap at $15.01B, most recent closing price at $35.65.

 

10. Range Resources Corporation (RRC, Earnings, Analysts, Financials): Engages in the acquisition, exploration, and development of natural gas properties primarily in the Appalachian and southwestern regions of the United States. Market cap at $14.05B, most recent closing price at $87.53.

 

11. ConocoPhillips (COP, Earnings, Analysts, Financials): Operates as an integrated energy company worldwide. Market cap at $81.95B, most recent closing price at $66.42.

 

Analyze These Ideas: Getting Started

Read descriptions for all companies mentionedAccess a performance overview for all stocks in the listCompare analyst ratings for the companies mentionedCompare analyst ratings to annual returns for stocks mentionedReal-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)

Dig Deeper: Access Company Snapshots, Charts, Filings

Apache Corp.(APA, Chart, Download SEC Filings)Anadarko Petroleum Corporation(APC, Chart, Download SEC Filings)Hess Corporation(HES, Chart, Download SEC Filings)Murphy Oil Corporation(MUR, Chart, Download SEC Filings)EOG Resources, Inc.(EOG, Chart, Download SEC Filings)Pioneer Natural Resources Co.(PXD, Chart, Download SEC Filings)Marathon Oil Corporation(MRO, Chart, Download SEC Filings)Devon Energy Corporation(DVN, Chart, Download SEC Filings)Cabot Oil & Gas Corporation(COG, Chart, Download SEC Filings)Range Resources Corporation(RRC, Chart, Download SEC Filings)ConocoPhillips(COP, Chart, Download SEC Filings)

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

Articles