Issues

Each earnings season, The Energy Strategist takes a detailed look at oil-field services giant Schlumberger’s (NYSE: SLB) quarterly results and subsequent conference call with analysts. One of the best-managed firms in the business, Schlumberger’s international reach and diverse operations--not to mention CEO Paal Kibsgaard’s candor about emerging trends in the energy patch--make the company’s quarterly conference calls must-attend events. In this issue, we analyze the key takeaways from Schlumberger's earnings call and their implications for our investment strategy.

The stocks in The Energy Strategist's Best Buys List doubled the return of the S&P 500 Energy Index in the first three months of 2012. Here's a look back at the quarter that was and our updated outlook for the stock market, economy and commodity prices. We also update our investment strategy for the coming quarters.

After the stock market's recent rally, finding undervalued names can be a challenge. Investors should consider taking some profits off the table in Portfolio holdings that trade above our buy targets and allocating the proceeds to shares of this undervalued Super Oil.

When most investors think of energy stocks, mega-caps such as Chevron Corp (NYSE: CVX) and Schlumberger (NYSE: SLB) usually come to mind. These giants should form the cornerstone of an investor’s portfolio. But some investment opportunities fly under the radar.

One of the founding precepts of this publication’s investment strategy hinges on the end of easy oil, or the reality that the massive fields that have supplied much of the world’s crude oil have reached maturity and are in decline. In this issue, we highlight some of the equipment providers and offshore-rig contractors that stand to benefit from this secular growth trend.

Investors worried about missing out on further price appreciation should remember the experience of the past two years, when the stock market rallied in the early part of the year but swooned during the summer. With a contentious US presidential election on the horizon and developed economies continuing to post anemic growth, the likelihood that the stock market will pull back increases in the back half of the year. Maintain your discipline and adhere to our buy targets. Investors who keep some powder dry and buy high-quality names during pullbacks will outperform the herd.

Oil services stocks have endured a tough run over the past year. But fourth-quarter results and comments from the industry's biggest players highlighted several investable themes.

The energy sector was a hotbed for mergers and acquisitions in 2011. Exploration and production companies were involved in $105 billion worth of deals last year, while pipeline companies were targeted in $59 billion worth of transactions. With companies able to access capital at attractive rates, expect deal flow to remain strong in 2012. Here are The Energy Strategist's top takeover plays for the coming year.

Since The Energy Strategist launched in 2005, the first issue of the new year traditionally has looked forward to what investors should expect in the coming year. My annual outlook focuses on five areas: the global economy, US equities, oil prices, coal prices and natural gas prices. These forecasts aren't carved in stone: New developments in the economy, stock market and energy markets require an outlook and investment strategy that change with the times.

Don't expect the EPA's recent report on hydraulic fracturing and groundwater contaimination to lead to restrictive regulations on this controversial production technique, especially in the current economic and political climate. Investors should continue to focus on our favorite operators in oil-rich unconventional plays.