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Navellier: Energetic Updates
09/09/2005 12:00 am EST
"In times like this, it’s difficult to focus on our finances," says Louis Navellier. "Nevertheless, I’m glad to say that we already have a large investment in the energy sector, and I don’t plan on abandoning it now." Here’s he updates some of his energy plays.
"Kerr McGee (KMG NYSE) is an oil and gas company that has proven reserves of about 1.3 billion barrels of oil equivalent. The company explores and produces oil and gas in the Gulf of Mexico, as well as in Africa, Asia, and Latin America. KMG is an expert in deepwater drilling. Kerr McGee and its partners recently announced that they were the top bidders for 16 deepwater leases in the Gulf of Mexico. On Wednesday, the company said it was resuming its Gulf operations and that it observed no structural damage. With surging oil and natural gas prices, the stock is a very good buy. I rate KMG a conservative stock with a $94 buy-below price.
"Lufkin Industries (LUFK NASDAQ) specializes in pumping oil. Through its Oil Field division (61% of sales), the company manufactures and services pumping units, automation equipment, and foundry castings. The company also provides computer control equipment and analytical services used to maximize well efficiency. The company also makes and services highway trailers. Lufkin has also strengthened its presence in Canada through the acquisition of D&R Oilfield Services. Lufkin is a moderately aggressive stock. Buy below $52.
"Stolt Offshore (SOSA NASDAQ) provides underwater engineering and construction services for offshore oil and gas producers. The company has a fleet of about 40 ships and more than 80 remotely operated vessels. During the past four quarters, sales have surged over 46%, and earnings are up over 250% thanks to increasing day rates and expanding operating margins. For September, I’m moving SOSA to the moderate group. Buy below $14.
"Helmerich & Payne (HP NYSE) is benefiting from surging day rates for drilling rigs in the booming oil service business. Thanks to higher day rates, the company’s operating margins are rapidly expanding. The company recently announced that during the past four quarters its sales rose over 40% and its earnings soared over 500%. The stock should continue to rally. Buy below $63."
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