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Friday, November 10, 2006

Energy and Natural Gas: Part II

Continuing from yesterday’s post, several oil and natural gas companies are beginning to trend and generate alpha according to our analytic. In total, we analyze nearly 70 “Oil and Gas” stocks, with twenty of them “buy” recommended this morning. The majority of the remaining stocks are “neutral” rated with only four “short/sell” recommended.

By far our strongest rated oil & gas stock is Veritas DGC Inc. (VTS 7/28/06) which is also one of the positions in our model stock portfolio. You’ll be hard pressed to find a better looking chart over the last two years than the one below.

Two other “Field Services” stocks that investors might look at are Oceaneering International Inc. (OII 10/18/06) and Schlumberger LTD. (SLB 11/6/06). Both have strong AAS Rating Scores and were upgraded to “buy” recommended stocks relatively recently.

Two stocks that have done phenomenally over the last week are World Fuel Services Corp. (INT 11/8/06) and Rowan Companies Inc. (RDC 10/25/06). RDC is a really interesting looking stock, well off its highs for the year and primed to cross over its 200-Day Moving Average.

I really could go on and on listing oil and gas stocks that have the potential to generate alpha. Energy (IYE) and Natural Resources (IGE) are sectors that I find very interesting at the moment. I think the markets have reached the point where those investors who sat on the sidelines over the last few months are now chasing returns, not only with regard to the tech sectors, but others as well. Investing in oil and/or natural gas companies might be a way for those who missed the train to hop back on, with caution of course.

To help get you started, here are a few companies that were upgraded to “buy” recommended status today. I wouldn’t necessarily invest in these yet, unless it’s a very small speculative position. But I’d certainly pay attention to them and others in the sector to see if a trend develops.
  • Dril-Quip Inc. (DRQ)
  • Swift Energy Co. (SFY)
  • EOG Resources Inc. (EOG)
  • Newfield Exploration Co. (NFX)
  • Pioneer Natural Resources Co. (PXD)
Short-Term Technical Indicators – Mixed after yesterday’s session. Breadth and volume still indicate an over-extended DJIA while the On-Balance Volume % hints that the S&P 500 might be losing steam.

Long-Term Market Model – Bullish since August 23rd.

Investor Sentiment – VIX edged higher to close at 11.01 and the VXN gained 0.27 to close at 16.66. Both are still trading below last week’s level.

Asset Allocation – 100% invested within the actively-managed, alpha producing portion of the overall investment portfolio.

Beta Exposure and Portable Alpha Generation
Date = Date of AAS “Buy” Recommendation

Top Rated Major Market Derivative – Fidelity NASDAQ Composite (ONEQ 8/30/06)

Top Rated Style-Box Derivative – iShares Morningstar Small Cap Core (JKJ 11/6/06)

Top Rated Sector Derivative – iShares Dow Jones Technology (IYW 8/15/06)

Today’s Top “Buy” Recommended Stocks
  1. RTI International Metals Inc. (RTI 10/11/06)
  2. Veritas DGC Inc. (VTS 7/28/06)
  3. Allegheny Technologies Inc. (ATI 10/5/06)
  4. F5 Networks Inc. (FFIV 9/20/06)
  5. Chaparral Steel Co. (CHAP 10/24/06)
  6. Harman International Industries Inc. (HAR 10/9/06)
  7. Manitowoc Co. Inc. (MTW 8/14/06)
  8. Sears Holding Corp. (SHLD 9/19/06)
  9. Cephalon Inc. (CEPH 10/24/06)
  10. Robbins & Myers Inc. (RBN 8/10/06)
Today’s Top “Sell” Recommended Stocks (Date of “Short/Sell” Recommendation)
  1. Hansen Natural Corp. (HANS 8/4/06)
  2. Apollo Group Inc. (APOL 10/13/06)
  3. Express Scripts Inc. (ESRX 9/22/06)
  4. Whole Foods Market Inc. (WFMI 11/2/2006)
  5. KB Home (KBH 10/13/06)
Today’s Top “Buy” Recommended Profund Mutual Funds
  1. Internet (INPIX 10/24/06)
  2. Mobile Telecom (WCPIX 10/26/06)
  3. OTC (UOPIX 8/16/06)
  4. Basic Materials (BMPIX 10/10/06)
  5. Technology (TEPIX 8/15/06)

2 Comments:

  • I just wanted to complement you on the great job you are doing with this blog. Best of luck in the future.

    Dan

    By Blogger Dan Beisiegel, at 3:24 PM  

  • Thanks Dan, best of luck to you and your blog as well.

    Justin

    By Blogger Justin Lenarcic, at 5:12 PM  

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