SM

[jb2257]

Do you know what's going on with SM? With all the positive news on this sector, it can't seem to get going to the upside.

[dan_s]

SM remains a mystery to me. They have solid growth in the Eagle Ford and Bakken. The financial results and my forecast look great. The company should generate close to $22 cash flow per share this year.

I call this the "coiled spring". At some point the market will figure it out. For example, take a look at the five year chart for CRZO. I was saying for two years that the share price was ridiculously low and it did nothing. Then during the second half of 2013 it started a strong move. I think the same thing may happen with SM this year.

The only negative I hear is that about a third of their Eagle Ford acreage is crap. So what, they have at least five years of drilling in the other 2/3. Plus, I think SM's East Texas and Powder River Basin will turn out to be nice growth areas for them. SM does produce a lot of natural gas, which may be a negative to some fund managers. Personally, I think it another plus for the stock because I think gas may spike to $6.00 this winter.

Hang tough. I own SM myself, so I am with you on this one. I have been selling Puts on the dips and doing quite well with that strategy.

[jb2257]

I appreciate your reply and realize they can't all be winners, but have to say that you have helped my portfolio tremendously.

[dan_s]

Hang tough. SM is going to be fine. They don't all move at the same time. Some good drilling results this quarter and SM could take off.