Sweet 16 Update - Feb. 23
Posted: Sat Feb 23, 2013 3:32 pm
Since Susan & I were on the cruise the week of Feb 10-17, it has been a wild week for me just trying to catch up and get the newsletter out this week. It has been a "roller coaster" week for the Sweet 16 but it finished on an uptick on Friday and is up exactly 8.0% YTD. The noise from the Fed that they won't keep printing money to buy our debt caused a bit of a confusion and the dip in crude oil prices.
Here are few thoughts on our Sweet 16:
> Cimarex Energy looks great. First Call increased their price target for XEC by $3 to $79.58. My Fair Value is higher.
> SM Energy reported very strong results. Ignore the GAAP loss for the quarter. Successful Efforts accounting makes EPS useless. Focus on CFPS. This one has huge upside in the Eagle Ford and the Bakken.
> EOG looks like a great buy to me under $130/share. First Call increased their target price to $144.20 this week.
> GPOR is down because of their stock offerings. Proceeds were used to get more leasehold in the Utica Shale. First Call's price target is $53.00 and I'd rate it a "Screaming Buy" up to $40. Once MWE gets the gathering system in place, GPOR's production in the Utica Shale is going through the roof. I am expecting daily production to triple from January 1 to December 31.
> CLR, OAS, KOG, WLL and TPLM: I am eager to see Bakken production growth from all five. KOG has announced Q4 production that is inline with my forecast model. [TPLM is a pure play on the Bakken that is now in my Small-Cap Growth Portfolio. If my forecast model is accurate, it will grow into a Sweet 16 stock quickly. You can find our profile on TPLM under the Watch List Tab.]
> SM had fantastic Q4 results and that one just keeps looking better to me.
> SFY still looks OK to me. It is trading at just 2X my 2013 CFPS forecast.
> Unit Corp (UNT) looks rock solid to me. See our updated profile on this one. Very strong management team up in Tulsa.
My spreadsheet with up-to-date Fair Value Estimates for each of the Sweet 16 is now available on the website. Just log on and click on the Sweet 16 Tab.
From now on, I will be highlighting a couple of our Sweet 16 during my opening remarks at each one of our luncheons in Dallas and Houston. We are also planning to schedule a live webcast during March where I will go over each company. For those of you out West, join me April 18-20 at "InvestFest 2013" in Scottsdale, AZ. I am the opening speaker on April 20.
CRZO and SFY will be moving from the Sweet 16 to our new Small-Cap Growth Portfolio just because they are under $1Billion in Market Cap. NBL and ESV are the top candidates for the Sweet 16, but I want to look at a few more.
I liked LINE's acquisition of BRY this week. Just wish I had more time to dig into the details. It sure would be good for this sector if we see more M&A. Several of the Sweet 16 look liked takeover targets to me. LINE is in our High Yield Income Portfolio.
Here are few thoughts on our Sweet 16:
> Cimarex Energy looks great. First Call increased their price target for XEC by $3 to $79.58. My Fair Value is higher.
> SM Energy reported very strong results. Ignore the GAAP loss for the quarter. Successful Efforts accounting makes EPS useless. Focus on CFPS. This one has huge upside in the Eagle Ford and the Bakken.
> EOG looks like a great buy to me under $130/share. First Call increased their target price to $144.20 this week.
> GPOR is down because of their stock offerings. Proceeds were used to get more leasehold in the Utica Shale. First Call's price target is $53.00 and I'd rate it a "Screaming Buy" up to $40. Once MWE gets the gathering system in place, GPOR's production in the Utica Shale is going through the roof. I am expecting daily production to triple from January 1 to December 31.
> CLR, OAS, KOG, WLL and TPLM: I am eager to see Bakken production growth from all five. KOG has announced Q4 production that is inline with my forecast model. [TPLM is a pure play on the Bakken that is now in my Small-Cap Growth Portfolio. If my forecast model is accurate, it will grow into a Sweet 16 stock quickly. You can find our profile on TPLM under the Watch List Tab.]
> SM had fantastic Q4 results and that one just keeps looking better to me.
> SFY still looks OK to me. It is trading at just 2X my 2013 CFPS forecast.
> Unit Corp (UNT) looks rock solid to me. See our updated profile on this one. Very strong management team up in Tulsa.
My spreadsheet with up-to-date Fair Value Estimates for each of the Sweet 16 is now available on the website. Just log on and click on the Sweet 16 Tab.
From now on, I will be highlighting a couple of our Sweet 16 during my opening remarks at each one of our luncheons in Dallas and Houston. We are also planning to schedule a live webcast during March where I will go over each company. For those of you out West, join me April 18-20 at "InvestFest 2013" in Scottsdale, AZ. I am the opening speaker on April 20.
CRZO and SFY will be moving from the Sweet 16 to our new Small-Cap Growth Portfolio just because they are under $1Billion in Market Cap. NBL and ESV are the top candidates for the Sweet 16, but I want to look at a few more.
I liked LINE's acquisition of BRY this week. Just wish I had more time to dig into the details. It sure would be good for this sector if we see more M&A. Several of the Sweet 16 look liked takeover targets to me. LINE is in our High Yield Income Portfolio.