EOG Resources (EOG)

[dan_s]

EOG is an incredible company and should be a Core Holding for all of you. 15% to 25% annual production growth for a company of this size is really something.

I have updated my forecast model for EOG, it will be posted to the EPG website late today. I hate to admit this, but I had a big screw up in my forecast model for EOG. The good news is that it had very little impact on operating cash flow per share (actually lowered it a bit), so the error had no impact on my valuation.

As a result of the company's increased production guidance, and lots of other very impressive stuff on the conference call, I am raising my valuation of EOG by $6.00/share to $110.00. This compares to First Call's price target of $102.16. I will be stunned if the FC price target does not drift higher as other analysts update their forecast models and submit them to First Call.

The only negative thing that I can say about EOG is that I wish they had done a better job at hedging.

[dan_s]

This is just something to think about.

I know a lot of you guys and gals are looking for "Home Runs". Instead of investing in small-caps, think about long-dated options on some of the Elite Eight in our Sweet 16. They are super high quality companies, which are trading at bargain prices today.

Personally, I prefer selling in-the-money long-dated Puts on large-caps because the trading volume is high and the premium erodes in your favor. Long-dated Calls ("Leaps") have more upside.

Just do not fall in love with this strategy (especially selling Puts). Make sure you understand the risk.