Sweet 16 Update - November 9

[dan_s]

The Sweet 16 held up OK the last couple days despite the "Obama Selloff". Frankly I don't think the guy really understands what the heck to do about the fiscal cliff but I'm praying for him. Regardless of what's done, there are going to be a lot more people getting layed off in the days ahead as employers make adjustments for Obamacare. Today I heard that more than 40 public companies have announced layoffs this week.

Crude oil prices dipped but found support and rebounded today.

GPOR and ROSE had outstanding 3rd quarters. WLL is a "Screaming Takeover Target". First Call actually raised their price targets for most of the Sweet 16. Fairly solid results across the board and growth will continue in Q4.

This is a really crappy market and likely to stay range bound despite strong preformance and oil price holding up well. I now think there is better than 50% chance we see natural gas over $4 by year-end. Driller (HP and UNT) should pick up when the active rig count starts moving up in December.

CRZO took a hit the last couple days but I see no reason. I raised by Fair Value Estimate after updating my forecast model and First Call's price target went up as well, to $34.34.

SFY: First Call's Price Target is $31.00 This one is trading at the deepst discount to my Fair Value Estimate.

EXXI is going to report a strong jump in production next quarter. First Davy Jone production on-line by end of November.