BEWARE THE STOCK PUMPERS OF MARCH:
My advice, based on years of investing chiefly for myself & a very few professional clients:
EVERYTHING ISN’T AS ROSY AS IT MAY SEEM:
First of all, be wary of recent U.S. stock market gains promoted by the fantasists at CNBC and Bloomberg TV in particular.
It’s just my opinion, BUT:
Don’t be fooled by the current & recent rise in U.S. stock indices.
Professional traders & hedge fund managers are now using computer-generated trading tools to manipulate the market.
No human traders, for these companies, are involved anymore … just robotic computers doing their masters’ bidding.
OH DEAR, NOT THAT:
Ordinary consumer stock-buyers are getting … how can I put it diplomatically … SCREWED!
But as I’ve opined previously, on the “Stockwits” Twitter page ( http://stocktwits.com/MurrayS) , I do believe there is a way to survive & outwait such machinations:
Invest in cash-rich companies that carry no debt, & will pay a (sustainable) dividend no matter which way the markets move.
And so today, here are some of my own choices (in no order of priority):
BEACH ENERGY [$BEPTF] …currently pays no dividend
And please note that this is an OTC (over the counter) purchase, in the U.S., requiring a qualified stock broker
So why buy shares in this international company, based in Australia?
Well for one things, Beach Energy is the second-largest onshore natural gas producer in all of Australia?
And the company’s production is likely to impressively soar in the future.
WHERE DID YOU SAY ALL THAT WAS HAPPENING:
Beach Energy recently drilled 2 new nat-gas test wells in the previously unexplored western edge of Australia’s Cooper Basin.
The very good news?
Beach Energy has raised its 2014 production guidance from 8 million to 9.3 million barrels of oil equivalent …
And BOE output was raised from 9.2 million to 9.6 million.
Sorry for the technical terms; but that’s what I call “energy speak”.
And the translation:
Those are very, very impressive results!
And how do these savvy Aussies do It?
THIS IS FRACKING GOOD NEWS:
Beach Energy has improved its FRACKING technology to exploit previously-unknown massive deposits of nat-gas in the Cooper Basin.
Yes, fracking! The very word that sends outraged environmentalists in a tizzy.
The very thing that America’s economically-challenged President won’t allow … even though increased use of this technology could create millions of jobs, as well as reduce unacceptable unemployment rates in the United States.
Excuse the preceding political diatribe … sponsored by the the Keystone Pipeline.
Well, not really. But you can see that I feel very strongly that Barack Obama is doing a disservice to his nation by finding every way he can to delay expansion of Keystone.
Yes, yes, I admit it. I watch Fox News, and particularly enjoy the “diatribes”of Neil Cavuto & Eric Bolling (“CashinIn”) on this subject.
GET ON WITH THE INVESTMENT ADVICE, PLEASE:
So my suggestion regarding Beach Energy?
Consider purchasing shares of Beach Energy [$BEPTF] now…
And be prepared to drill down to soaring increases & capital gains, in the next 3 years.
DON’T STOP READING JUST YET … THERE’S MORE TO COME:
And now onto two other possible energy-related investments…as we now begin a potentially profitable odyssey through the Canadian stock market.
First, let’s take a look at BELLATRIX EXPLORATION (BXE.CA):
The good news is that shares in Canada’s “junior” energy sector have begun to post impressive gains lately.
Spurring this upwards thrust has been Vermillion Energy’s take-over of Elkhorn, a private resource company.
[For a generous & reliable income stream, as well as future capital gains, I also recommend Vermillion Energy ($VET.CA), currently yielding more than 5%]
And that Eikhorn purchase will dramatically boost Vermillion’s European production, thanks to an addition of many offshore North Sea oil & nat-gas wells…a standard which should help boost Bellatrix’s share value, now and in the future.
After all, Vermillion’s Elkhorn take-over means sky-high “Brent” (versus American WTI) prices for Vermillion’s North Sea oil: up to $115 recently.
As well as soaring prices for nat-gas production, in general, thanks particularly to increased European demand.
And why this soaring Euro demand for energy?
(1) An unusually cold winter in most of Europe this season; and
(2) Uncle Vlad (Putin’s) invasion of the Crimea, and further threats to the Eastern Ukraine
BUT NOW BACK TO BELLATRIX EXPLORATION:
So far, the junior pure energy plays in the U.S. have been hit by worries about more regulatory interference from the Obama administration.
Also in Bellatrix’s favor is a lower Canadian dollar which has boosted the appeal of Canadian energy stocks.
After all, nat-gas producers, like Bellatrix, can now hedge out most of 2014 at $4/mcf +…
And the meaning of the preceding tech talk?
Companies like Bellatrix will exceed their cash flow estimates for the first time in 3 years.
Moral of this energy story?
Bellatrix appears undervalued to this observer … considering its production, & profit potential, for the next several years.
ONE MORE ENERGY RECOMMENDATION TO GO:
And now onto another energy favorite of mine: PARAMOUNT ENERGY RESOURCES ($POU.CA), currently yielding 6%.
Paramount could more than TRIPLE its 2014-15 production … from 20,000 boepd to over 60,000 boep!
And, to use an NBA metaphor, this kind of production increase is of Lebron James’ proportions.
And don’t forget that Asian countries – particularly China & Japan – are clamoring to buy Canadian nat-gas & oil…
Not to mention another recent trend:
Government-controlled Asian energy entities are increasingly buying shares of Canadian energy producers … and sending the share prices of such companies soaring.
And I would take that to be a good omen for the future of Paramount Energy Resources.
HOW ABOUT A CANADIAN INVESTMENT RECOMMENDATION THAT ISN’T RELATED TO ENERGY:
And finally, for a change of pace, let’s look at one non-energy Canadian company:
CANADIAN TIRE ($CTC.A, CDNAF), yielding 1.6%
And please note that in the United States, Canadian Tire is an OTC (Over The Counter) stock, requiring a qualified broker to purchase it.
But why Canadian Tire?
(1) Third-quarter operating earnings ($1.85 a share) were up 15% from last year;
(2) Canadian Tire’s CEO recently announced a 25% increase in the company’s annual dividend to $1.75; and
(3) Candian Tire’s earnings are expected to rise further in 2014-15.
And this is partly because of an ingenious idea by company executives.
Canadian Tire has spun off its many company-owned properties into a dividend-paying REIT.
And the cash, generated by that “spin-off”, will be used to expand the company’s current & future operations.
And note too that Canada’s economy is thriving, thanks to the masterful stewardship of Stephen Harper & his finance minister(s).
[Harper makes Barack Obama look like an amateur in this sphere … which, of course, America’s community-organizer President is.]
Again it’s just my personal opinion… But Canadian Tire looks like a very good investment consideration, for capital gains & an increased (sustainable) dividend, in the next several years.
MORE TO COME IN THE COMING WEEKS:
Please stay tuned for more investment advice in the next few weeks, as I get the hang of using my new Web-site software.
Nuff said for today.