January 10th - Blog

[dan_s]

Except for ROSE, which was down 1 cent per share, the Sweet 16 was all green today. They are all still trading at deep discounts to my Fair Value Estimates, which are based on $85/bbl WTI and $3.50/mcf for U.S. natural gas. Keep in mind that most of the Sweet-16 are heavily weighted to oil. WTI closed over $94/bbl today and strong support is building at this level.

Today's natural gas storage report was very bullish. Did anyone think we were going to get a 201 bcf draw from storage? It wasn't even that cold last week. This tells me that the utilities are still burning a lot of gas for power generation. Second half of January weather is looking bullish for natural gas.

AREX, one of our Small-Cap Growth Portfolio stocks made a big move today. Volume was rather high but I cannot find any news. They must have made a good impression with some fund managers at the conference on Tuesday.

I spent the afternoon working on Ensco plc (ESV). I will be sending out the profile and my forecast to our members tomorrow in a Flash Alert.

I got a report from one of our members today on how strong the outlook is for the midstream MLPs. I could not agree more. There is a HUGE backlog of pipeline and other midstream facility projects out there. This is "as good as it gets" for the midstream companies. One of my favorites (MWE) was in the Top Five Best Buys list. Several others from our MLP Watch List were on their BUY list.