Sweet 16 Update - December 14

[dan_s]

I updated the Sweet 16 spreadsheet and reposted it to the website under the Sweet 16 Tab. It shows my Fair Value Estimate and First Call's Price target for each company. Not much change in my valuations in the last couple weeks. I am expecting strong Q4 results from all of them.

SM Energy (SM) is now my Top Pick for taking advantage of the recent run-up in natural gas prices. My Fair Value Estimate is $134.00, compared to First Call's Price Target of $101.62.

Others that will benefit the most from higher natural gas prices are RRC, UNT, XEC, EOG, EXXI, GPOR. DNR and GTE have the least exposure to gas. If you haven't read GTE's guidance for 2014 you need to check it out. I think they are going to report a big increase in proven reserves.

The Sweet 16 was down about 1% this week (seven stocks up and nine down). The entire energy sector has been down, primarily on concerns about oil prices and just some profit taking. I think there is also some concern that the weather will cause some production misses. XEC is the only company that I've seen mention it.

First Call's price targets have been drifting higher since Q3 results came out.