Changes being made to the Sweet 16
Posted: Tue Feb 08, 2011 10:18 pm
These changes will be effective after the markets close on February 9.
Sweet 16 changes:
TGA and KOG are going back to the Watch List
PTEN and PXP are moving up to the Sweet 16
There is nothing wrong with TGA or KOG.
IMO TGA is still trading 30% to 40% below Fair Value but the unrest in Egypt is not going away anytime soon. I believe this geopolitical risk is too high and it will remain a dark cloud over TGA until it is resolved. Nervous shareholders are likely to sell into each rally, holding down the share price.
KOG’s 4th quarter production came in 10% under my forecast and I believe the company will continue to have difficulty getting their wells on-line due to the lack of equipment and crews in the Bakken. Small-caps will have trouble getting services. This problem will be resolved in 2011 but KOG may have several rather disappointing quarters before it is.
I’m extremely bullish on the onshore drillers as a group. PTEN has recently added more services (read the profile) giving it an edge on the rest of the pack. I believe that PTEN is currently trading at a $10/share discount to its Fair Value.
PXP is trading well below my estimated Fair Value. It also gives us more exposure to the Granite Wash and the Eagle Ford.
It was tough for me to decide between Forest Oil (FST) and PXP. I believe PXP offers us slightly more upside.
Premium Members can find our company profiles for PTEN, PXP and FST on the website. Read them carefully before you invest.
Sweet 16 changes:
TGA and KOG are going back to the Watch List
PTEN and PXP are moving up to the Sweet 16
There is nothing wrong with TGA or KOG.
IMO TGA is still trading 30% to 40% below Fair Value but the unrest in Egypt is not going away anytime soon. I believe this geopolitical risk is too high and it will remain a dark cloud over TGA until it is resolved. Nervous shareholders are likely to sell into each rally, holding down the share price.
KOG’s 4th quarter production came in 10% under my forecast and I believe the company will continue to have difficulty getting their wells on-line due to the lack of equipment and crews in the Bakken. Small-caps will have trouble getting services. This problem will be resolved in 2011 but KOG may have several rather disappointing quarters before it is.
I’m extremely bullish on the onshore drillers as a group. PTEN has recently added more services (read the profile) giving it an edge on the rest of the pack. I believe that PTEN is currently trading at a $10/share discount to its Fair Value.
PXP is trading well below my estimated Fair Value. It also gives us more exposure to the Granite Wash and the Eagle Ford.
It was tough for me to decide between Forest Oil (FST) and PXP. I believe PXP offers us slightly more upside.
Premium Members can find our company profiles for PTEN, PXP and FST on the website. Read them carefully before you invest.