The Sweet 16 pulled back during the week ending May 8 as investors digest first quarter results, which (as expected) were not good. Oil & gas prices are firming up and the rest of 2015 should be a steadily improving outlook for the upstream companies.
As of Friday's close, the Sweet 16 is up 18.5% YTD, compared to the S&P 500 Index that is up just 2.8%.
SM Energy (SM), my Top Pick for 2015, was the only member of the portfolio that gained ground last week. IMO it is trading at ~50% of break-up value.
I will be working all weekend to update the individual company forecast models, so check the website for those that interest you. I will have more to say on the Sweet 16 tomorrow afternoon.
The interns are hard at work updating the company profiles. They will be sent out via e-mail as fast as I can get them reviewed.
Sweet 16 Update - May 9
Sweet 16 Update - May 9
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Sweet 16 Update - May 9
We will publish an updated profile on Newfield Exploration (NFX) on Monday. Read it carefully as NFX has a lot of upside for us. It is already up 34% YTD, but it is a possible double for us this year. Their STACK play is the real deal.
I thought I would get all of the forecast models update this weekend, but I did not quite make it. I will finish updating CRZO, CLR and DVN on Monday morning. All of the others have been updated and you can download them from the website.
First quarter, as we all knew it would be, was a crappy quarter. However, this group is a solid bunch and they are all going to make it and come out much stronger because of their focus on lowering costs. Most of the companies had to take ceiling test or impairment write downs of their fixed assets. Those non-cash adjustments are very confusing and distortive for investors. Stay focused on cash flows from operations.
On Monday I will send out a special Flash Alert with my adjusted Fair Value Estimates for each company. A very good sign is that First Call Price Targets have increased since the first quarter results. I expect them to continue to drift higher if WTI can just hang around in the $58-$60 range this quarter. There is very little resistance on my chart for WTI until about $80/share, so we could see a nice move if the weekly crude oil storage reports start showing draws week after week.
I thought I would get all of the forecast models update this weekend, but I did not quite make it. I will finish updating CRZO, CLR and DVN on Monday morning. All of the others have been updated and you can download them from the website.
First quarter, as we all knew it would be, was a crappy quarter. However, this group is a solid bunch and they are all going to make it and come out much stronger because of their focus on lowering costs. Most of the companies had to take ceiling test or impairment write downs of their fixed assets. Those non-cash adjustments are very confusing and distortive for investors. Stay focused on cash flows from operations.
On Monday I will send out a special Flash Alert with my adjusted Fair Value Estimates for each company. A very good sign is that First Call Price Targets have increased since the first quarter results. I expect them to continue to drift higher if WTI can just hang around in the $58-$60 range this quarter. There is very little resistance on my chart for WTI until about $80/share, so we could see a nice move if the weekly crude oil storage reports start showing draws week after week.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group