Sweet 16 for 2011
Posted: Sat Dec 31, 2011 4:50 pm
The final version of the Sweet 16 Growth Portfolio for the year 2011 has been posted under the Sweet 16 tab. There is also a spreadsheet showing my Fair Value estimate for each company as of today along with the current First Call price target for each company. EPG members can find my Net Income and Cash Flow Forecast for each company under the Sweet 16 tab. All you have to do is log on, click on the Sweet 16 Tab and then click on the individual company logo to see it.
The Sweet 16 for 2011 finished the year down 6.07%. This is only the second year since 2001 that the Sweet 16 has generated a negative return. The other year was 2008. The 3rd worst year was a 28% gain. For 2010 the Sweet 16 was up 72%.
> Only five of the companies generated positive returns: MIND up 88.6%, GPOR up 35.8%, GEOI up 29.3%, EXXI up 15.5% (since being added on 10/24), and CLR up 13.4%.
> All four of the companies based in Canada (GTE, PBG, PMG and TGA) were down big, despite the fact that they are all heavily weighted to oil. All four are expected to report higher earnings in 2011 than 2010 and all four are fundamentally sound. My take is that (a) U.S. investors pulled a lot of money out of the TSX exchange this year and (b) risk adverse investors are fearful of companies doing business in foreign nations. For example, TGA is now on track for the best year in the company's history. Production will soon be closing in on 20,000 BOPD (which is sold under contracts tied to Brent). However, the fact that TGA's assets are all in Egypt and Yemen has frightened away a lot of investors.
> Only two of the companies had somewhat disappointing operational results: PBG and XEC PetroBank should get a nice boost from their stake in PetroBakken, which is expected to report significantly higher production in Q4.
The only company that is trading close to my estimated Fair Value is GeoResources (GEOI). It will remain in the Sweet 16 because I'm now expecting it to report significant progress in both their Bakken Shale and Eagle Ford drilling programs.
I will now work on the "Sweet 16 for 2012". There will be a total of four changes. An EPG Flash Alert will be sent to all of our Premium Members on Tuesday morning to announce the changes.
The Sweet 16 for 2011 finished the year down 6.07%. This is only the second year since 2001 that the Sweet 16 has generated a negative return. The other year was 2008. The 3rd worst year was a 28% gain. For 2010 the Sweet 16 was up 72%.
> Only five of the companies generated positive returns: MIND up 88.6%, GPOR up 35.8%, GEOI up 29.3%, EXXI up 15.5% (since being added on 10/24), and CLR up 13.4%.
> All four of the companies based in Canada (GTE, PBG, PMG and TGA) were down big, despite the fact that they are all heavily weighted to oil. All four are expected to report higher earnings in 2011 than 2010 and all four are fundamentally sound. My take is that (a) U.S. investors pulled a lot of money out of the TSX exchange this year and (b) risk adverse investors are fearful of companies doing business in foreign nations. For example, TGA is now on track for the best year in the company's history. Production will soon be closing in on 20,000 BOPD (which is sold under contracts tied to Brent). However, the fact that TGA's assets are all in Egypt and Yemen has frightened away a lot of investors.
> Only two of the companies had somewhat disappointing operational results: PBG and XEC PetroBank should get a nice boost from their stake in PetroBakken, which is expected to report significantly higher production in Q4.
The only company that is trading close to my estimated Fair Value is GeoResources (GEOI). It will remain in the Sweet 16 because I'm now expecting it to report significant progress in both their Bakken Shale and Eagle Ford drilling programs.
I will now work on the "Sweet 16 for 2012". There will be a total of four changes. An EPG Flash Alert will be sent to all of our Premium Members on Tuesday morning to announce the changes.