Sweet 16 Update - August 28
Posted: Sun Aug 28, 2016 2:27 pm
I am a day late with this one because I was up in Dallas for a couple of days for my son's birthday. We also found out that his wife is expecting their first baby, so it was an exciting trip. This will be our third grandchild. The other two live in Iceland.
For the week ending August 26 the Sweet 16 was down 0.20%. It is now up 46.53% YTD, compared to the S&P 500 Index which is up just 6.12% YTD. The overall market flopped around all week and there was not a lot of news. Oil prices drifted a bit lower and natural gas prices drifted a bit higher. IMO the outlook for natural gas prices is getting very bullish. I will discuss this on the podcast. Oil prices will probably flop around on rumors of what OPEC is going to do at their next meeting in September. Regardless of what OPEC does or doesn't do, market forces have gotten the global oil market back into balance. Any "unplanned" supply outage will cause oil prices to spike since there is very little unused production capacity. It seems even Iran has peaked out.
First Call's price targets for most of the companies continue to drift higher. The analysts seem to really like the Permian Basin acquisitions which have taken CXO, PE, PDCE and SM price targets higher.
Diamondback Energy (FANG) is now trading above my valuation of $95.00/share. I recommend harvesting that gain and moving the money to other Permian companies like CXO, PE and RSPP which IMO have more upside.
The "gassers" should draw a lot more attention after Labor Day. Wall Street will focus more on the gas market when the weather turns cooler. AR, GPOR and RRC are my favorite gassers. I will send out a profile on EQT, which is a strong candidate for the Sweet 16, late next week. EQT is Robert Rapier's top pick for gas.
I will be sending out updated profiles on GPOR, XEC, FANG and PDCE early this week.
An updated Sweet 16 spreadsheet will be posted to the EPG website this evening. It shows my current valuation for each company compared to First Call current price target.
For the week ending August 26 the Sweet 16 was down 0.20%. It is now up 46.53% YTD, compared to the S&P 500 Index which is up just 6.12% YTD. The overall market flopped around all week and there was not a lot of news. Oil prices drifted a bit lower and natural gas prices drifted a bit higher. IMO the outlook for natural gas prices is getting very bullish. I will discuss this on the podcast. Oil prices will probably flop around on rumors of what OPEC is going to do at their next meeting in September. Regardless of what OPEC does or doesn't do, market forces have gotten the global oil market back into balance. Any "unplanned" supply outage will cause oil prices to spike since there is very little unused production capacity. It seems even Iran has peaked out.
First Call's price targets for most of the companies continue to drift higher. The analysts seem to really like the Permian Basin acquisitions which have taken CXO, PE, PDCE and SM price targets higher.
Diamondback Energy (FANG) is now trading above my valuation of $95.00/share. I recommend harvesting that gain and moving the money to other Permian companies like CXO, PE and RSPP which IMO have more upside.
The "gassers" should draw a lot more attention after Labor Day. Wall Street will focus more on the gas market when the weather turns cooler. AR, GPOR and RRC are my favorite gassers. I will send out a profile on EQT, which is a strong candidate for the Sweet 16, late next week. EQT is Robert Rapier's top pick for gas.
I will be sending out updated profiles on GPOR, XEC, FANG and PDCE early this week.
An updated Sweet 16 spreadsheet will be posted to the EPG website this evening. It shows my current valuation for each company compared to First Call current price target.