Tuesday is a day of jitters about central bankers, forex rates in Sweden and UK, Australian bond pri...
Special Report: Energy Gains
04/23/2004 12:00 am EST
Energy stocks remain among the favorite sectors of our advisors. Here we offer a look at the latest favorites from five of the best: Price Headley, Schaeffer's Investment Research's Joe Sunderman, Dennis Slothower, Marketocracy's Ken Kam, and Prudential's Ralph Acampora.
(For more on the advisors cited below, please click on their photos.)
"Our latest new swing trade recommendation is Energy Conversion Devices (ENER NYSE)," says Price Headley in his Aggressive Stock Trader service. "The company is a developer and manufacturer of technology and devices used in alternative energy production). The stock had been trending higher, but met some resistance around 11.35 early last week. It recently broke through that resistance, and once again moved higher on stronger volume. We recommend you buy, with a trading target of 14.04 with a closing stop under 10.49." In his BigTrends NetLetter, he adds, "Our sector fund recommendations are designed to be longer-term holdings. Fidelity Select Energy Portfolio (FSENX) is made up of oil and gas stocks that continue to make slow and steady progress, and we expect the same to continue through the middle of the year, With OPEC's slowed production, oil supplies are getting smaller and smaller. That, coupled with the fact that we're entering the heaviest auto fuel consumption period of the year, and the oil companies are in an enviable position. Despite temporary down days, the general momentum of these stocks remains bullish."
Joe Sunderman, analyst with Schaeffer's Investment Research, also likes an "alternative energy" play. He says, "Our latest featured stock is FuelCell Energy (FCEL NASDAQ). The stock has been a relative-strength leader, moving from 13.50 to 18.50 since the beginning of April. We believe that there is fuel left in this issue to charge it higher. Pessimism continues to grow. Short interest stands at 6.3 million shares, which represents 10% of the stock's float. What's more, it would take more than six days to cover these shorted positions at FCEL's average daily trading volume. This greatly increases the chances of the security benefiting from a short-covering rally. Options speculators are also not expecting much from the stock. And Wall Street is largely ignoring FCEL, as only five analysts currently rate the shares. Of those five, only one rates the equity a 'buy', with the remaining four handing out 'holds'. Any upgrades or additional coverage could boost FCEL sharply higher. Traders should target a move to 21 with a stop-loss on a trade below 16.50."
In his Stealth Stocks newsletter, editor Dennis Slothower offers a trio of natural gas buys. He says, "Houston Exploration (THX NYSE) is an independent natural gas and oil company. Its operations are primarily focused in south Texas, offshore in the Gulf of Mexico, and in Oklahoma and Arkansas. For the fiscal year ended 12/31/03, revenues rose 43%, while net income before accounting change increased 90%. Edge Petroleum Corporation (EPEX NASDAQ) is an oil and natural gas company engaged in the exploration and development in the US. For the fiscal year ended 12/31/03, revenues rose 62% and net income before accounting charges totaled $4.7 million, up from $750 thousand. Hugoton Royalty Trust (HGT NYSE) is an express trust that relies on the net profits interest of predominantly natural gas producing leases located in the states of Kansas, Oklahoma, and Wyoming. For the fiscal year ended 12/31/03, revenues rose from $30 million to $80.7 million, while distributable income rose from $29.6 million to $80.4 million."
"To determine our strong buy recommendations, we examine the trading activity of the 50,000+ advisors monitored by Marketocracy and look for stocks where the best-performing investors are buying, while the underperformers are selling," says Ken Kam. "Two energy-related firms fit that criteria. Petro-Canada (PCZ NYSE) is an integrated oil and gas company that both explores for and produces crude oil and natural gas, as well as distributes petroleum-based products. The 'best' have been increasing their position in PCZ for the last 4 weeks, first adding 50% to their position in the last two weeks of March, before adding an additional 11% over the last 14 days. Their purchases have largely been made at prices between $43-$45 per share. Meanwhile, Peabody Energy (BTU NYSE) is a private-sector coal company with majority interests in 33 coal operations located throughout all major United States coal-producing regions. Since mid-March, the best have been steadily buying into BTU, increasing their position by 26% in the last two weeks alone. The best were adding to this position as recently as today, and have been buyers at prices ranging from $43-$48 per share. By comparison, the rest have lightened their holdings."
"We continue to see many constructive technical patterns within the energy sector and see potential for further outperformance in the months ahead," says technical expert Ralph Acampora of Prudential Securities. "We continue to find names that we believe offer substantial upside potential. Top technical picks within the AMEX Oil index are Total S.A. (TOT NYSE) and Occidental Petroleum (OXY NYSE). In the oil service area, we remain somewhat selective near term, but continue to expect superior relative and absolute price performance from BJ Services (BJS NYSE) and Smith International (SII NYSE). And in the small cap arena, we cannot overlook what we view as continued strong long-term potential for St. Mary Land & Exploration (SM NYSE) and Houston Exploration (THX NYSE). In the natural gas area, we remain very impressed with technical prospects for Burlington Resources (BR NYSE). We also have very favorable technical outlooks for Anadarko Petroleum (APC NYSE), Stone Energy (SGY NYSE) and Pioneer Natural Resources (PXD NYSE). In the same group, we also like Apache Corp. (APA NYSE). The stock has just completed an intermediate-term consolidation pattern with a recent upside breakout."