Growth in the Energy Patch

04/15/2005 12:00 am EST

Focus:

Louis Navellier

Editor, Blue Chip Growth and Emerging Growth

Louis Navellier has earned the enviable top spot on ranking compiled by the Hulbert Financial Digest ; he is now ranked as the #1-performing investment newsletter for the past 20 years. Here, we look at some of his recent buys in the energy patch.

"We’re now in a very uncertain, almost scary market environment. But while the overall stock market has slowing earnings growth, the average stock on our Buy List has over 60% sales growth and over 300% earnings growth. Despite this incredible growth, our average stock still trades at less than 14 times this year’s estimated earnings. I’m so confident about the stocks on our Buy List that I’m not selling any stocks this month. All of our stocks are fundamentally superior and should perform well in the wake of their earnings results.

"Berry Petroleum (BRY NYSE) buys properties with heavy crude oil reserves for sale to refining companies. Its core properties are in California. With proven reserves of 110 million barrels of oil, Berry is an expert at squeezing the most from these old fields by using thermal recovery. This involves injecting steam into heavy crude oil reserves to reduce oil viscosity, allowing it to flow to the surface. What I especially like about the stock is that despite over 60% annual sales growth and even better earnings growth, BRY is trading at less than 14 times this year’s estimated earnings.

"Cal Dive International (CDIS NASDAQ) provides oil and gas services in the Gulf of Mexico and other offshore regions. It is a major sub-sea contractor, with a fleet of 22 vessels and 25 remotely operated vehicles that install, maintain, and inspect offshore platforms, pipelines, and production systems in the deepwater areas of the Gulf of Mexico and the North Sea. It also buys and operates mature gas and oil fields in the Gulf of Mexico, and has proven reserves of 74.7 billion cubic feet of natural gas and 12.5 million barrels of oil. The oil service business is exploding because major oil companies are scrambling to add to their depleted reserves.

"NS Group (NSS NYSE) makes seamless and welded tubular products used in oil and gas exploration and production. In addition, natural gas utilities and transmission firms use its seamless and welded line pipes. The combination of both the steel and oil service business makes the company a hot stock. I especially like how the company’s sales increased 119% during the past year and its earnings grew over 550%. Despite the company’s incredible sales and earnings growth, it trades at only seven times this year’s estimated earnings, which makes the stock a bargain."

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