Sweet 16 Update - Sept 16

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Sweet 16 Update - Sept 16

Post by dan_s »

Oil prices are up and natural gas prices are hanging tough, but all of the Sweet 16 are down this week, Why?

It is called "Market Risk", otherwise known as more sellers than buyers this week.

Sometimes the daily or even weekly moves in stock prices seem illogical. There is a lot of "noise" that impacts the overall market. Today investors are worried about the UAW strike. Some people think high oil prices equal inflation and therefore more Fear of the Fed raising interest rates.

Bidenomics makes no sense to me because pissing away more money on wind, solar and wars seems foolish, especially when the money is borrowed.

Two of the most profitable companies in the Sweet 16 on a per share basis (SBOW and VTLE) sold off because they decided to raise some equity instead of making large acquisitions with 100% debt. I personally prefer large acquisitions to be paid for with a combination of debt and equity because it helps keep the balance sheet "in balance". I also like companies that have a lot of running room. SilverBow and Vital have added a lot more running room with their recent acquisitions.

I will have a more detailed Sweet 16 Update tomorrow morning.

Hang tough, the fundamentals point to much higher oil prices and market forces should firm up U.S. natural gas prices. BTW one of our former Sweet 16 companies, PXD has none of their oil hedged and they sell a lot of oil each day. I just posted my updated profile on PXD to the EPG website.
Dan Steffens
Energy Prospectus Group
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