I'm not trying to hurry you. You won't miss out entirely if you wait.
But to stake the ground floor in the coming oil and uranium ("yellowcake") run-up—and chalk up at least 60% gains in 2010—we need to act right now.
As I predicted, oil and uranium are going vertical... First—here's where I see the best gains in OIL
I expect my four favorite oil picks to soar to the north—to the tune of 60% gains in less than six months—180 days—and that's a conservative estimate.
It’s a stock-picker’s moment if ever there were one. And this time the super-winner oil stocks will number no more than a scant handful.
Here are my best picks for this year's oil run-up that should hand you at least 60% gains in the next 180 days—
Pick the right needles out of this haystack and your portfolio doubles its worth. It’s as simple as that. These are the sectors—and the companies leading the charge—that offer us a near-foolproof path to growth and wealth.
Own these companies now—before crude
I won't tease you by concealing where I expect the gains to be made. The gains I foresee—the places where I’m putting my own money—are centered on—
Crude oil price increases, resulting in...
Skyrocketing demand for oilfield services, and also...
An explosion in the prices of crops, food and chemicals...
Bold predictions, you may think. But I believe I offer you the credentials to make them.
In the 2006-2008 oil run-up—my picks made 116.8%. Here's what's in store for you now
In the last oil stock run-up, from June 2006 to June 2008, the investments I uncovered for my members delivered returns you’ll barely believe (but they are fully documented)—
116.8% (yes, you read that right) on growth and aggressive-growth energy investments. So I think I know what I’m talking about when I say...
Don’t be fooled by inventory numbers or mainstream press stories that never mention "supply." If you look only at "demand" posturings, you'll miss one whopping opportunity. I’ll prove it.
And don’t be misled by today's energy-stock prices. They’re a blessing in disguise for investors with vision. I’ll prove that, too.
Finally, don’t think these are the only opportunities in energy investing. From nuclear through coal through natural gas through wind/solar/biomass... from extraction through refining/processing through transportation through delivery through energy services... and even looking farther afield to industries tethered to energy prices such as chemicals, food and fiber... energy (and its twin, the environment) offers you the best long-term investments on this planet.
A little later, I’ll give you some of these longer-term energy plays, and direct your attention to dividend-payers that gladden the hearts of retirement planners everywhere.
But job #1 is making you wealthier. Right now. So let’s get started.
FORECAST #1: Oil Up to $100 Before Year-End
With gasoline back in $2.99-a-gallon territory, some Americans think the oil shock has passed and they can get back behind the wheel of their SUVs. Little do they know the harbingers of another oil spike are right in front of us. Global crude stockpiles began shrinking last year. There's no glut of gasoline, and demand is escalating from emerging economies.
Look worldwide for the reasons—
a) Decades of relatively low oil prices left producers without profits to make the huge investments needed to increase production capacity.
b) China is on the biggest oil raid in years to feed its voracious industry.
c) India is looking to add a half-million new gas-guzzling cars in less than a year.
Now the chickens are coming home to roost. Tight credit worldwide only worsens the situation today. Not to mention that oil wells everywhere were shuttered when crude went south of $70/bl. Bottom line: We lack the added capacity we need... and we won’t have it for years to come.
But that's perfect! For investors like you and me, anyway.
Even during recent down months for the S&P, my energy picks actually gained 17%. And stocks that show strength during downturns usually lead the way back up.
Now I’m betting money—my own money—that oil prices will continue their upward march. They’ll hit up to $90 by summer and will be back into triple digits by the close of 2010.
The signs are everywhere, but here are the six major ones...
Developments in China alone could push up oil prices worldwide. When you add in all the rest, oil prices are almost certain to move toward triple digits.
But triple digits aren’t necessary for my predictions to start coming true. All that’s required is that crude prices move north of $80 a barrel and stay there, as they already have.
FORECAST #2: Canada Takes Off
Earlier I mentioned a giant producer working the Athabasca, Peace River and Cold Lake tar sands in the western Canadian province of Alberta. While this company has the region more or less locked up, transmuting tar sands (also known as oil shale or bitumen) into refined products—gasoline, diesel, home heating oil, jet fuel—is devilishly difficult.
It’s mining, not drilling, and strip mining at that—earth-moving machines big as houses scraping greasy rock right out of the earth. The shale is then heated in huge retorts to sweat out the crude, with natural gas providing the flame. What’s left is a “sour” high-sulfur crude that takes costly additional refining to sweeten and upgrade.
Not pretty. And not cheap. But crude oil at $80-$90 per barrel makes it worth doing!
When crude passes $80, watch for this company’s stock to take off. It’s already the dominant player in Canadian oil sands. And last month it strengthened its dominance many times over by announcing it will become—via acquisition—Canada’s leading integrated oil company. I rate this firm, now trading around $24, a candidate to double by the beginning of 2011.
FORECAST #3: Deep Sea Oil Drilling: the Frontier of the 21st Century
Oil and gas prices languished during the ’80s and ’90s, and so did drilling. As a result, four out of five of the world’s “jack-up” rigs—the ones that plant their feet on the seafloor—are more than 20 years old. The situation is similar on dry land. The easy oil is long gone; what’s left must be sucked out with costly, exotic techniques like horizontal drilling and in-situ fracturing.
Make no mistake—huge reserves still exist, especially undersea, as in the vast Tupi discovery off the coast of Brazil. But Tupi oil is buried underneath two miles of ocean plus two miles of ocean floor; even in calm seas (and they’re mostly not), drilling that deep with a “jack-up” rig is like scooping up a beach with a toy shovel.
What’s needed is the longest of drills hooked to the most powerful of motors, anchored on submarine-like “submersible” rigs that dip beneath the sea surface when storms blow up.
What’s needed, in other words, is undreamt-of technologies so advanced they're engineering frontiers—rigs that reach four miles below the ocean surface, drill bits that chew through flint, seamless drill pipes that withstand unthinkable torque. I know a company that has it all—the rigs, the bits, the piping and much more.
But perhaps the best thing this company has is customers lined up to the tune of $11.1 billion worth of unfilled orders that will keep it busy through all of 2010, regardless of drilling activity or oil price fluctuation. With a cushion like this and a stock price currently around $32, this company is an odds-on bet to double by year-end.
And what about those submersible rigs? This company owns 13 of them. They’re busy constantly, contracted to developers around the world on contracts executed at higher day-rates than those of many competitors. This firm has customers around the block, too—$600 million+ worth, more than enough to cover the year’s revenues even if it doesn’t book one more order in 2010.
The stock is still cheap, though, currently trading around $11. When oil prices rise past $80 or so, this relatively small company will offer close to a pure play on deepwater drilling. Be prepared for this company’s stock to double at least in the next eight months.
FORECAST #4: From the Oilfields of Chicontepec to Iraq—a New Giant's Bet Pays Off
I follow a company that’s trading around $15—way undervalued, in my view. Why? Partly because it’s thought to have underbid for a massive job in Mexico's Chicontepec field.
What many investors don’t know, however, is the importance of Chicontepec to Pemex, Mexico’s giant state oil company.
This oil services outfit has whip-smart management and has said all along it expects to make big money in Chicontepec. I believe them, but that’s not the only reason I pay close attention to this stellar company.
It has plum contracts to perform work in Iraq's North Rumaila and Zubair oilfields. Iraq development will be massive in coming years. This company is in position to be the fastest-growing major oil servicer over the next two years and should double its value by the end of 2010.
Second—my uranium picks are up 51% since January. Here's why you should see at least 60% gains by year-end
The world's cleanest fuel is set to hand you 60-75% gains before the end of this year. And that fuel is "deep yellow" or "yellowcake"—uranium.
In January, I rated six uranium producers a strong BUY. And since January they've handed my readers these returns:
Uranium producer #1—up 55%
Uranium producer # 2—up 68%
Uranium producer # 3—up 24%
Uranium producer # 4—up 60%
Uranium producer # 5—up 19%
Uranium producer # 6—up 80%
And you can still cash in because this uranium run-up is still at the starting gate.
You've got a great entry point because uranium prices are way cheaper than they should be.
The first wave of uranium buying started in January when a rash of utilities worldwide were ramping up their reactors. They've burnt through all the spent fuel rods that until this year had powered their plants, and they need to stockpile once again.
The momentum started building when Sweden, Britain, Finland—even Italy—signaled a major foray into nuke power. And to cap it all, in January, Japan announced it would restart its once-controversial fast breeder reactor, the "dream" reactor, as they call it.
But the real muscle behind the uranium run-up is China. While the Chinese have been scouring the globe very openly for all the coal, oil and iron ore they can clean up, they've been hoarding uranium on the hush.
The Chinese still have nowhere near enough "yellowcake" to keep their reactors online. We know that Chinese factories are humming again, and have been for four months. Coal-fired power alone cannot fuel this industrial colossus. No way they can do it without nukes.
Here at home, the White House may be "tweeting" the sun and windpower song, but privately, they know we cannot cut our carbon footprint anytime soon without nuke power.
And, to put it bluntly, the U.S. Secretary of Energy has heard quite an earful from our utility industry. They've told Mr. Secretary: You want clean energy? You want zero carbon? And you want it now? Great. We're ramping up our reactors.
And I've saved the best for last. The best buy signal of all—
The world's largest uranium producer is actually snapping up uranium on the pricey spot market. There's no way the 800-lb. gorilla of the industry would grab uranium at spot market rates unless they were 100% convinced that prices were ready to roll. So, I ask you—shouldn't you be looking at uranium for your portfolio?
Here are two of my favorite picks—
Uranium's Blue Chip Company. They own 15% of the world's uranium market and they're the world leader in low-cost uranium production. While most uranium producers have cash costs of $30-$40 per pound mined, this company mines the stuff for under $20 a pound—adding heaps to their profit.
They're operating mines in Canada, the U.S. and soon in Kazakhstan—far and away the world’s richest and highest-grade uranium mines. To put this into perspective, some of their mines have ore grades over 20 percent uranium oxide; some mines being mined globally and commercially have ore grades less than 0.5 percent.
This mining company sells much of its production under long-term contracts. But in markets like this, they're still rolling over legacy contracts and earning much higher rates.
Of course, the stock isn’t riskless, but any production issues are already priced in, and we should see steady-on-course production growth in coming years. Investors are already showing appreciation for this company—but you could see 60% gains by year-end if you get in now.
Uranium's FAST Company. We expect this company to give you double your money at least by the end of this year. And if it's a takeover target, you could see 300% returns.
We hear the Chinese may be hot on the acquisition trail of this fast-moving producer—now the world's eighth-largest. The company's profitable and adroitly-managed operations in Namibia and Malawi are just too tempting for the Chinese, who want to cinch their uranium stake in Africa.
These Namibia and Malawi operations are the world's newest uranium projects. And this "can-do" company has joint venture interests in Australian uranium deposits as well. They've already got over 240 Mlb of uranium in reserve. Not bad for a newcomer! This company is a strong buy in my "Gushers" Portfolio, and it's an aggressive position. I have faith in the performance of this company because so far, they've cleared every hurdle and then some. And the takeover potential here could handily reward investors with a 300% return on the money.
In The Energy Strategist, I recommend a small number of stocks in the uranium industry as part of what I call a field bet. The concept is simple: The uranium mining business can carry risk.
But potential rewards are equally big. Some plays in my field bets gave my readers gains of more than 800%. So, come on board The Energy Strategist today, and supercharge your portfolio with one, two or a basket of uranium stocks. I'm recommending that you get in now for the maximum return.
We've done the work for you
You'll find each of these picks profiled at length in The Energy Strategist, the news service I edit as principal of The Energy Society, and the chief benefit when you join.
While my focus in this letter has been aggressive, The Energy Strategist includes plenty of advice and counsel for the cautious and the conservative.
Stock-picking is what we do. Whether your style is aggressive, conservative or somewhere in between, The Energy Strategist makes it easy to know where you stand, with selections grouped from most aggressive to least—
“Gushers” Portfolio—The hottest of the hot. Currently I’m following 8 specific “Gusher” positions plus three “baskets” of “Gusher” securities in alternative fuels, biofuels and uranium mining.
“Wildcatters” Portfolio—“Wildcatters” Portfolio selections are growth plays but most also pay a generous dividend. Currently there are 14 positions in the
“Wildcatters” portfolio and all but one pay a dividend.
“Proven Reserves” Portfolio—This is the “gold chip” portfolio for the more cautious investor—currently 11 companies that pay dividends up to a mind-blowing 16.9%! “Proven Reserves” investors sleep well at night; the volatility in this portfolio is low, and so is the turnover.
A company has to satisfy my standards before it makes the cut in my portfolios. I pore over mind-numbing SEC reports (so you don’t have to)... sift through company financials, poking holes in the numbers... often call and e-mail company insiders... even make on-site visits when warranted. I signal when to buy them, when to hold and—unlike many other advisory services—when to dump them, too.
The portfolio holdings are not the only companies I follow. I have a warm-up roster, too. And this roster, currently including 100 companies, is my “How They Rate” list.
From large to small, domestic to foreign, “brown” to “green,” these firms occupy every nook and cranny of the energy universe. Each one is ranked “buy,” “sell” or “hold.” And each is a candidate for promotion to “Gushers,” “Wildcatters” or “Proven Reserves” status—when it clears the bar.
I’ve focused on white-hot oil- and uranium-related opportunities in this letter, but energy is a far broader topic. To me, “energy” encompasses everything from the obvious—oil, gas, coal, nuclear, “green” power—to the not-so-obvious, such as the agriculture and chemical giants.
Environmental investing counts, too, since governments worldwide do not want our energy consumption to befoul our global nest. Looking at the longer term, The Energy Strategist identifies go-get-them opportunities in—
Gas extraction and liquefied natural gas (LNG). The market for oil is global but markets for natural gas are local. Think back a few months to when Russia had Europe on its knees, begging not to be left to freeze in the dark. Gas prices shot into the stratosphere in Europe where Putin & Co. supplies nearly every cubic foot... but at the same time gas was going for a paltry $4 in the U.S.
Domestically, we're sitting on more natural gas than any other nation on Earth with reserves that’ll last 300 years—and there are cost-effective ways to extract them from huge shale deposits in Texas, Appalachia and elsewhere.
One company leading the way also is a leader in our safe and sane “Proven Reserves” Portfolio—and pays a mind-blowing dividend to boot, currently 16.9%! Another “Proven Reserves” company operates LNG-hauling tankers across the oceans of the world and pays a nearly-as-breathtaking dividend of 12.4%!
Old King Coal. The cheapest, most readily available fossil fuel, coal also is under heavy attack from environmentalists and others. That makes it a dicey proposition for many investors right now, but adventurous souls still score big paydays trading covered calls in the largest independent coal producer in America, an entry in our “Gushers” portfolio. Not familiar with covered calls? Join The Energy Society and let us teach you how it’s done... as well as pitfalls to avoid.
Pipelines and transportation. If you’re looking for big dividends plus stable long-term growth, you can hardly do better than pipeline and tanker companies. Oil and gas prices may bounce around but these stocks tend to stay put, plus pay dividends often in the double digits. Our “Proven Reserves” portfolio currently includes a pipeline company with a handsome 9.9% yield and the aforementioned tanker operator with the pinch-me-I’m-dreaming 12.4% payout.
Solar, wind, geothermal and more. Not for the faint of heart, alternative energy has been slammed in the current market downdraft. But as we empty the ground of oil, gas and coal, it’s inevitable we’ll turn to alternative energy sources. Now is the time to start collecting your alternative-energy investment ideas, and our “Gushers” portfolio is the place to begin. You’ll discover 10 alternative-fuel plays plus 10 biofuels plays (some the same company). More than half these companies are rated “buys” right now.
Food and fiber. Rising oil prices likely will goose the stock of an ag giant I follow which dominates ethanol and biofuel processing worldwide.
Chemicals. The same forces ought to brighten the fortunes of the chemical-manufacturing behemoth whose ironclad patents act as a stranglehold on food and fiber growers the world over.
Meeting all your needs... and then some
The “Gushers,” “Wildcatters” and “Proven Reserves” Portfolios are only the beginning. When you join The Energy Society, you get the kind of personal attention and hand-holding you’d expect from a private investment counselor—at a fraction of the cost.
You’ll be issued a secret password and directed to a for-your-eyes-only website where you’ll discover a 24/7 service that includes—
Finally, there’s me. Sure, to my colleagues I'm an energy investment expert, but friends say I’m a regular guy just the same. I speak often at investment events, where you can buttonhole me any time, plus I love contact with members. I’ll answer any e-mail you send—right away if it’s urgent, within a day or two otherwise. And when only a personal chat will do, you’ll have the phone number that rings on my desk.
Join now and receive up to three Special Reports, free. Go here for details.
Tired of down markets? Here’s how to make things right again
With the possibility of an oil- and uranium-driven run-up just days away, there’s not a moment to lose. Join The Energy Society NOW and start making your investment choices for the greatest return.
We make it so easyThe first thing all new Society members receive is a free Special Report, an energy-investing primer called “Jump Start for New Members: 90-Minute Wonder.” Whether you’re a novice energy investor or you have a degree of experience, “90-Minute Wonder” will get you off to a fast, safe start. From Canadian tar sands to zero-pollution fuel cells, here’s a bird’s-eye view of energy economics—who the players are, how they relate to one another. With this grounding, you’re positioned for gratifying gains that lie ahead.
With a One-Year No-Risk Membership Commitment ($399)...
... you also receive a second free Special Report, “The Future of Energy: Looking Back from 2030.” Which sectors will be hot in 2010... 2012... 2015? Where will you be making money in a decade... or two? “Looking Back from 2030” is not an exercise in crystal ball-gazing but a solid projection based on trends in place right now.
With a Two-Year No-Risk Membership Commitment ($729)...
...you also get “The ABCs of Options to Hedge Risk." We built our spectacular energy-investing track record without ever once making a put, call or straddle. We aren’t afraid of risk to be sure, but done improperly, these instruments are not investments but mere gambles. Using hedges to reduce risk is something different altogether—a way to have your cake and eat it, too, protecting you against air pockets without having to sell out your positions. Done wrong, though, options could wipe you out. This “ABCs” instruction manual takes you step by step to an understanding of options—what they are, how they work, how they can enhance your peace of mind when used sensibly.
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Prefer quarterly payment to your credit/debit card? It’s easily arranged. Choose this convenient option and we’ll debit the card of your choice every three months until you instruct us to stop. We'll send you the same premiums as a one-year member.
Whichever method you choose, YOU RISK NOTHING.
That is correct. The first 90 days of your subscription term is in effect a “free trial” because you may cancel at any time for a FULL REFUND.
“Full refund” means precisely what it says: Every penny returned in full—no delays, no hassles, no questions asked.
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Will YOU catch the wave?
Oil prices are headed up and certain stocks will head up with them—inevitably. It could be years... decades... before you got another crack at such a BOOM. Will you discover which stocks to buy? Will you make the no-risk commitment and start benefiting from membership in The Energy Society today? It’s your choice, of course. I hope you choose well.
Publisher, The Energy Strategist
P.S. I forgot to mention... there are 11 energy stocks that continue to attract the uninformed and foolish. Make sure you know which ones are among this “dirty almost-dozen” with “Energy Blacklist,” available FREE to the first 100 to sign up. If you needed a push to join The Energy Society... this is it.
P.P.S. Taxable income: If you're interested in holding a good-yielding stock in your IRA or 401(k), I have a great reco for you. Since it pays you dividends in the form of shares rather than cash, it's not "unrelated business taxable income." I can also give you a super closed-end energy fund—it pays you distributions on a 1099, not a K-1—so it, too, escapes "unrelated business taxable income" status.