Energy Prospectus

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.

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.

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

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.