Great Opportunities

[dan_s]

EPG Cruise (March 2-9, 2014): We will send details on how to book your stateroom on the EPG cruise Monday afternoon or early Tuesday. Our booking agent has moved the sale date up to June 26 - 28 rather than over the 4th of July holiday as we had earlier thought. You will still be able to book after June 28, but the best overall package for EPG members will be for those who book next week. Make sure to check your e-mail on Tuesday.

The broad market decline last week has created some buying opportunities in the energy sector. It is impossible to predict if the overall market will extend the “correction”, but the stocks in our three portfolios are trading as if oil & gas prices are much lower.
> The forecast models that I use to value our Sweet 16 and other portfolio companies assume $85/bbl for WTI crude oil and $3.50/mcf for North American natural gas.
> The August NYMEX contract for WTI closed at $94/bbl on Friday and
> The July NYMEX contract for Henry Hub natural gas closed at $3.81/mmbtu
> Natural gas futures for this winter are over $4.00/mmbtu
> Under our Sweet 16 Tab is a spreadsheet that compares my Fair Value Estimates to the First Call 12-month price targets for each company in our Sweet 16 Growth Portfolio.
> “Fair Value” is my estimate of what I think each company would sell for today if it were put up for sale. Think of it as today’s “break-up value”.
> The Sweet 16, as a group, is trading at 48% below my Fair Value Estimates and well below First Call’s price targets. Keep in mind that the analysts who provide price targets to First Call are using very conservative oil & gas price decks.

At next Tuesday’s luncheon at The Hess Club, I will be opening with comments on why I believe we will see an improved market for natural gas in the U.S. this winter with higher and more stable prices. We are expecting a large crowd, so you must register if you wish to attend.