Sweet 16 Update - Nov 19

[dan_s]

The Sweet 16 Growth Portfolio was up 5.87% for the week ending November 18. It is now up 42.85% YTD. This compares to the S&P 500 Index that was up 0.85% for the week and 6.75% YTD.

A focused group like this has a much higher beta than the S&P 500 Index.

Continental Resources (CLR) was up the most last week and is now up 122.24% YTD. It continues to report outstanding results in SCOOP & STACK.

Noble Energy (NBL) was the only stock that was down for the week. The only reason that I can see for the small dip is that Noble is not in today's "sexy" plays. Wall Street is in love with the Permian Basin and to a lesser extent SCOOP/STACK in Oklahoma. Noble takes a bit more work for Wall Street and investors to understand, but I like their production mix and their diversified asset base. We posted an updated profile and forecast model for Noble to the EPG website last week. My valuation of NBL is $54.20, compared to First Call's price target of $44.30.

We will be sending out updated profiles on CXO, EOG, NFX, PXD and RRC in a few days. Our "Super MBA Student Interns" have finished their reports and I just need to review them. The help that I get from the SMU MBA program is a "blessing". Plus, I get to meet some of America's finest young men and women.

Oil Prices: All eyes are on OPEC now. If they come up with a workable agreement on 11/30, the price of oil should push over $50/bbl. If they don't, the price may dip to $40/bbl.

Natural Gas & NGL prices: The fundamentals are more in control for these two. Read my post ("Winter") under the View From Houston tab. Low oil prices are actually bullish for natural gas and NGLs because it is the big decline in "associated gas" production which has tightened the markets for these two. They will tighten a lot more over the next four months. Devon Energy (DVN) and Gulfport Energy (GPOR) are both solid BUYs at today's share prices if you agree with me that gas and NGL prices are going higher.

Antero Resources (AR) and Range Resources (RRC) are two of the premier natural gas companies in the world.

First Call's price targets are above my valuations for XEC, CLR, FANG, PE, and PXD

Trading volume will probably be down next week because of the Thanksgiving Holiday.