Riding the Texas Oil Boom

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

U.S. stocks bounced strongly last week, as the Dow Jones rose 2.38%, the S&P 500 recovered 2.71% and the tech-heavy NASDAQ jumped 2.39%. The MCSI Emerging Markets Index also rose 0.43%.

You were stopped out of Gazprom (OGZPY) with a double-digit percentage gain of 10.18%. Although I think this stock is still insanely cheap from a “buy and hold” perspective, for now, let’s step back from the political risk of Vladimir Putin’s shenanigans.

Big gainers in your Bull Market Alert portfolio included Micron Technology Inc. (MU), which soared 13.16% and moved back to a BUY. GasLog Ltd. (GLOG) gained 9.83% and hit a new 52-week high. AbbVie Inc. (ABBV) added 4.50%, and Thermo Fisher Scientific, Inc. (TMO) rose 3.05%.

This week’s Bull Market Alert recommendation, EOG Resources (EOG), is my top pick to profit from the shale energy boom in the United States.

Based in Houston, Texas, EOG Resources (EOG) is one of the largest independent crude oil and natural gas companies in the United States. Many analysts also believe that it is the single best-positioned oil company in America.

Here’s why…

EOG is the largest acreage holder and a top producer in the Eagle Ford Shale in South Texas. Thanks to recent technological advances, EOG just revised the reserve potential of the Eagle Ford shale to 3.2 billion barrels of oil equivalent (boe) from 2.2 billion boe — a whopping 45% increase. EOG also has one of the best core positions in North Dakota’s Bakken, as well as an emerging position in the West Texas Permian Basin.

All of these have allowed EOG to grow its production by an average of 43% over the past three years. Sales and cash from operations have also increased at annualized rates of at least 35% over the same period. Capital spending has stabilized, and the company generated $70 million in free cash flow in 2013 — its first year of positive free cash flow since 2005.

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EOG’s stock has also taken off recently and has strongly outperformed the S&P 500 over the past three months. I think it has plenty more to go.

So buy EOG Resources, Inc. (EOG) at market today, and place your initial stop at $90.00.

If you want to play the options, I recommend the July $105 calls (EOG140719C00105000).

Also, this is a good time to take Tata Motors (TTM) off of your watch list (discussed HERE) and buy the stock at the market price today. Place your stop at $32.00. If you want to play the options, I recommend the July $38.00 call options (TTM140719C00038000).

Portfolio Update

The Bank of Ireland (IRE) gained 0.35% over the holiday-shortened week. Although IRE remains firmly on the road to recovery, and is free of its bailout obligations, the Irish government still owns a 14% stake in the bank. Since the government does not seem to be in any rush to cash out of IRE, it may be a sign of future gains yet to come. IRE is a HOLD.

AbbVie Inc. (ABBV) added 4.50%. ABBV is holding at the 200-day moving average (MA) after a relatively swift biotech sector correction. Looking back over ABBV’s trading history, the last 200-day MA touch resulted in a sustained 16% run back to all-time highs. Given ABBV’s favorable drug pedigree, any positivity in this Friday’s earnings report could mean another swift return to recent highs. ABBV will report earnings on April 25, before markets open. ABBV is a HOLD.

Thermo Fisher Scientific, Inc. (TMO) rose 3.05%. TMO stands as the world leader in the scientific medical device arena, with annual revenues of $17 billion, and 50,000 employees covering 50 countries. TMO will report earnings on April 23, before markets open. TMO is a HOLD.

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Grifols, S.A. (GRFS) added 0.53% last week. Grifols made the news last week after donating 40,000 doses of blood-clotting factor to the World Federation of Hemophilia for each of the next three years. GRFS specializes in blood medicines, pharmacy products and diagnostic technology and has inroads into more than 100 countries. GRFS is a HOLD.

Micron Technology Inc. (MU) jumped 13.16%. Last week was a strong one for MU, which made a quick recovery back to the 50-day MA. MU closed one cent above its 50-day moving average and is back to a BUY.

GasLog Ltd. (GLOG) jumped 9.83% over the past four trading days, spiking to another new 52-week high. GLOG announced the close of its recent common stock offering. GasLog issued 4,887,500 new shares of stock, at $23.75 per share, for total net proceeds of nearly $110 million. GLOG remains a BUY.

Nicholas Vardy

BIG ANNOUNCEMENT: On May 1, I’ll inform you about a significant opportunity… one that could have a major impact on your portfolio, for years to come. Stay tuned…

 

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