Large Tech Stocks Review – IBM Is a Hold
We have recently downgraded our outlook on IBM (IBM) following mixed Q1 2012 results. This stock reported $2.78 operating EPS which exceeded the street’s $2.65, while $24.67bn revenue was slightly shy of $24.82bn consensus. 2012 EPS guidance for “at least $15” largely maintains the original full-year view after accounting for this quarter’s $01.13 beat.
This stock has EPS of $2.78 in Q1 which benefitted from a one-time tax restructuring in Latin America. Adjusting for this alone would imply a $0.02 EPS miss; however, the benefit was reinvested in $225m of restructuring opportunities that would not have otherwise been undertaken.
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Oil Stock Watch – Is Dividend Cut Coming From Pengrowth
Pengrowth (PGH) provided a detailed presentation of its Lindbergh SAGD project to analysts yesterday afternoon. The company addressed the geology, the anticipated timeline and the projected cost of its Lindbergh development. The company is targeting first steam for Phase I in 4Q14 with production ramp up in 2015. Phase I expected to reach peak production of 12,500bbl/d. The 17,500bbl/d Phase II is projected to start steaming in 2Q16 with production starting to ramp up in 3Q16.
The Lindbergh project offers significant background and location cost advantages in the Cold Lake area in comparison to similar scale projects in the Athabasca oil sands region. The asset provides all season access, limited muskeg, roads, power and natural gas supply all in close proximity to the site, and its ability to not rely on expensive Fort McMurray contractors and service providers.
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Oil Stock Watch – US Refinery Sector is a Strong Buy
When analyzing the US refinery stocks, we are forecasting another strong quarter ahead for US refiners in Q2 2012. Our updated 2012 EPS estimates suggest continued earnings momentum for the refiners this year despite ongoing sluggishness of the US economic recovery. Gasoline crack spreads have jumped since early May 2012, diesel cracks have remained at attractive levels and wide WTI and other inland crude discounts continue to hold.
The US inland refineries continue to have a clear crack spread advantage over their coastal competition. Gasoline cracks in the Rockies, Mid-Cont and Southwest have improved through Q2 2012. West Coast margins have remained volatile with crack moving between lows of $10/bbl to a supply constrained spike of over $30/bbl in mid Q2.
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Top Telecom Stocks - Verizon Continues to Rise Above the Competition
This telecom stock has the most estensive LTE network and 3G coverage, is well positioned to initiate pricing disruption within the its peer group of telecom stocks. In the long run, we feel the pricing strategy is positive for Verizon (VZ) as it puts the company in a position to rake in the profits from increasing data usage and removes the risk of voice plan erosion.
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Oil Stock Watch – Apache Investor Day Update – Remains A Hold in Current Stock Market Conditions
In analyzing with oil stocks to buy in current bear stock market conditions, we review the information conveyed at Apache’s (APA) Investor Day.
This oil stock held its Investor Day with a focus on outlining its expanding drilling inventory in the U.S. onshore, specifically in the Permian and Anadarko Basins. These plays will be the key driver of its growth through 2016, with overall corporate production per share growth for this oil stock targeted to be between 6% and 9% through that time period. Our current production estimates for 2012 and 2013 remain within the company’s outlined guidance ranges. This oil stock which trades on the North American stock markets has aggressively expanded its Permian and Anadarko Basin presence with multiple acquisitions over the past two years, and it estimates that it has now accumulated 67,000 future drilling locations in these two areas with plans to generate 13% and 24% production growth rates through to 2016, respectively. Complementing the emerging U.S. oil plays will be its increasing inventory of projects in the North Sea, Egypt, Australia and the Gulf of Mexico.
Other than onshore US, this oil stock has a suite of projects that will add 200 MBOE/d of additional production by 2017 from Australia (90 MBOE/d), Canada (51 MBOD/d), Egypt (24 MBOE/d), Gulf of Mexico (20 MBOE/d) and the North Sea (11 MBOE/d).
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Oil Stock Watch – Enerplus Slashes Dividend – Business Model Now Sustainable
Enerplus (ERF) announced a 50% reduction to this stocks monthly dividend to $0.09 per share from $0.18 per share, effective for the July 2012 payment, reducing the Company’s current yield to 8.0% based on the prior day’s close.
Despite spending levels that were unsustainable this oil stock which trades on the North American stock markets had discussed plans to bal¬ance spending through the monetization of undevel¬oped assets and its equity portfolio over the next 12 to 18 months and had just recently reaffirmed its commit¬ment to its dividend. We suspect that a dividend cut was anticipated by the market and partially priced-in given the stock’s recent decline and as such.
With the revised dividend incorporated into our modelling of this oil stock, total distributions decrease by approximately $170 million per year, reducing estimated combined capital expenditures and distributions (net of DRIP) in 2012 and 2013 by ~7% and ~17% respectively.
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Which Oil Sands Stocks To Buy in Today’s Bear Market – April 2012 Oil Sands Production Update
When analyzing which oil sands stocks to buy in today’s bear market it is important to obtain an understanding of the macro oil sands development in Alberta, Canada. The below provides a great summary of activity in the oil sands in Alberta and provides valuable insight on which oil sands stocks are buys and which oil sands stocks you should look at shorting and/or selling.
The most notable recent production increase has been from the continued ramp-up in volumes from the Suncor (SU) Firebag expansion, with production prom this project averaging 100,000 bbl/day in April 2012. This production average compares to the new bitumen production design capacity of 130,000 bbl/day and is up from a 2011 year end exit rate of 80,000 bbl/day.
In situ production from the oil sands reached another new record high in April 2012 as total production was approximately 750,000 bbl/day. The most recent increase in oil sands production has been driven by SAGD projects under development by various oil stocks in addition to the above increase production by Suncor at Firebag.
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Which Drilling Stocks to Buy in The Current Bear Stock Market – Weekly US Drilling Activity Update
In determining which oilfield service company stocks to buy in the current bear stock market, it is key to review the current US drilling activity.
The U.S. rig count was up 8 rigs last week to finish at 1,874 rigs. The gas rig count continues its move lower with natural gas prices remaining near 10 year lows and is close to going under 500 rigs, after finishing last week at 509 active gas rigs. The oil rig count picked up some of its prior week losses, gaining 15 rigs to close last week at 1,338 rigs.
The Permian rig count picked up 7 rigs to finish at 408, up from 401 rigs last week but down from the recent high of 423 that was realized in mid-May.
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Which Oil Stocks To Buy in The Current Bear Stock Market – Review of Devon Energy Western Canadian Drilling Results
In analyzing oil and gas stocks which trade on the North American stock markets, one of the key factors which determines whether or not the stock will outperform it’s peers in the various stock markets is how successful there drilling results are to date. With natural gas plunging, oil drilling results become more and more of importance to these stocks trading on the North American stock markets. We have assembled never seen before oil drilling results which is derived from the various provincial registries in Western Canada in order to provide an unbiased view of which oil producers trading on the North American stock markets are having the greatest drilling success. In spending hundreds of hours pulling this data together we also have access to which oil stocks are drilling the most dry holes and having the worse results and have an insight on what stock will be moving up in the stock markets and which stock will be plummeting. Another key factor with natural gas prices reaching 10 year lows is what the actual production composition of the oil wells are as a lot of investors buy oil stocks as they believe they are drilling oil wells, but after reviewing the actual production data on a lot of these wells, they are actually natural gas wells which will have a huge long-term impact on the oil stocks share price given engineering firms will continue to reduce their natural gas price decks.
With an exclusive relationship with a group of well know former executive and technical staff of oil and gas companies in Western Canada, we have obtained the attached list of wells drilled by Devon Energy Corporation (DVN) in Western Canada which have production data up to February 2012.
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Hot Stock Buys – Second Wave Petroleum Should Be Considered a Buy
If you feel the stock markets are approaching bottom and you are actively buying stocks we do not want to tell our readers how to buy stocks but strongly suggest you take a look at Second Wave Petroleum as we feel it is an oil stock that you should consider adding to your portfolio.
This oil stock is a $125 million dollar market cap stock with a 80% oil weighting. This oil stock has 94 (47 net) section land position in the Beaverhill Lake, where 31 (14.8 net) wells have been drilled and completed to date and generally realizing strong initial rates of over 600 boe/d on a 30-day basis which makes this stock a buy. We continue to hold strong conviction that activity to date, both by this oil stock and its peers, confirms the high quality of the play to which we assign a project value of over $5.00 per share. Recent drilling cycle times have been reduced by about 20% for this hot oil stock which trades on the North American stock markets, which saw accelerated drilling in the first quarter, while other incremental costs savings associated with reduced industry activity in the WCSB and increased availability of acid and services should present further cost savings and improvements to the company’s capital efficiencies.
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