Sweet 16 Update - April 2

[dan_s]

The Sweet 16 lost 1.61% during the week that closed April1. It is now up 47.96% YTD.

The S&P 500 Index gained 0.06% and is now down 4.62% YTD.

All 16 stocks moved higher on April 1, which is an encouraging sign for me. Analysts are telling their clients that Biden's SPR oil release is a political stunt. It will not solve the oil supply shortage.

Joe Biden announced a 1 million bpd increase in releases of oil from the SPR on Thursday.
> Team Biden did not bother to see if draws from the SPR are physically possible at that level. They aren't.
> Only 400,000 to 500,000 bpd can be drawn from the SPR, so Old Joe's scheme won't have much impact on oil supply. We have already been drawing oil from the SPR. Joe's BIG ANNOUNSEMENT is like pissing on a forest fire.
> We do need heavy oil from the SPR to help address the diesel shortages, but Biden did this for political reasons. He is clueless and probably doesn't even know that there are many different grades of crude oil. You cannot make diesel from ultra-light shale oil. Without the Keystone XL pipeline, we are short the heavy oil needed to make diesel.
> I do think we should be doing something to resolve the situation in Venezuela. We need their heavy oil now, but Venezuela is so screwed up it may take years to fix, if ever.

I am getting more bullish on natural gas and NGL prices. They are much higher than what I am using in my forecast/valuation models.

The top gainers in the Sweet 16 YTD are all gassers.
> AR up 77.37%
> RRC up 76.95%
> CRK up 72.93%
> EQT up 65.20%

As of today, my Top Pick is ESTE that is up 20.29% YTD, but trading at a 150% discount to my valuation of $33.00/share. ESTE is going to double their production when they close the BigHorn Acquisition in mid-April. Buy ESTE before they announce the closing.

The updated Sweet 16 spreadsheet will be posted to the EPG website. It shows my current valuation for each stock.

[allen46]

Thanks Dan!!! I'm quite heavily invested in your Sweet 16 especially the gassers. Biggest positions in CRK, AR, RRC EQT and SBOW. Portfolio at an all time high!

[dan_s]

Great new!
When you decide to "harvest" some of those gains, take a look at the minerals companies in our High Yield Income Portfolio. We will be sending out an updated profile on Brigham Minerals (MNRL) on Monday morning.

We are finishing The View from Houston newsletter today. Goal is to send it out this afternoon. I spent all week double checking my stock valuations.

My podcast should be on the website early this afternoon.