Tag Archive | "oil"

June Free Stock Pick of the Month – Halliburton Company (NYSE: HAL)

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Another value investment and spring stock pick that I am extremely hot on is the oilfield & drilling services titan, Halliburton Company (Current Price: 30.25 – NYSE: HAL – Current Quote).

Trading at just under $31/share, Halliburton is becoming extremely oversold and is currently available at an excellent price. Despite the recent dip in oil & natural gas prices, worldwide energy demand continues to rise over the long haul and Halliburton is one well-run company that will continue grow.

Halliburton has dropped along with big oil recently (parallel with the recent dip in oil & natural gas prices); but this is one company that we think will rebound at a tremendous pace; due to the fact that (unlike most of the Big Oil majors), Halliburton’s earnings/profits aren’t directly attached to price of oil & gas.

They netted over 627 million in the first quarter of 2012 and they are currently selling at a price almost 50% below their 52-week high. With a PE ratio of 9.14, an EPS of 3.19, and a Market Cap of almost 29 Billion, Halliburton is currently trading at 8 times the company’s earnings.

To put this into perspective, most fortune 500 companies will trade around 13-14 times their earnings (Note: The hot Social Networking IPO company, Facebook (NASDAQ: FB – Quote) is currently trading at price 100 times their earnings).

We are predicting and shooting for a target price of $40.00 (or a 30-35% increase) in the next 2 years. Halliburton still has fantastic earnings and plenty of room to grow.  And, once Oil and Natural Gas prices begin rising again (which they will eventually do), we see Hallibuton growing at a pace faster than the industry.

Halliburton Company (HAL) is a buy up to 33.25, especially for investors who are seeking long-term, value investments and want to put their money into a well-run company with continuous profits (even smaller investors).

(Note: I remain LONG on HAL at my purchase price of 31.50).

Higher Crude Oil Prices By 2012? Time To Buy Crude Oil Futures

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Higher Crude Oil Prices By 2012? Time To Buy Crude Oil Futures: Oil. It’s one of the few things on this planet that none of us, at least for the time being, can live without. It powers our cars, our busses, our airplanes, our cruise ships, and a lot of our appliances as well. Even those of you with electronic cars that are super green are almost certainly utilizing gas in some way, shape, or form. The price of crude oil exceeded $100 per barrel once again this week, and market speculators are calling for the price at the pump to reach $4.00 per gallon on the national average by the time that 2011 is said and done that. That being said, it might be high time that you buy oil future or crude oil ETFs (exchange traded funds) or stocks right now.

We’ll take a look at one particular EFT right now, the United State Oil Fund LP (USO). Click Here to see all of the up to date ETF information for USO. The US Oil Fund was priced at $39.64 at the start of the day with the average price of gas sitting at $3.393 per gallon according to the AAA Daily Fuel Gauge Report.

Historically, as the price of a barrel of crude oil rises, the prices at the pump go up, most of the time dramatically. The last time that the price of an average gallon of regular unleaded gasoline was above $4.00 per gallon was in 2008, before the prices came screaming down by the end of the year. The numbers nearly peaked around $4.00 per gallon in April and May of this year, but they did drop a tad into the $3.30s, where they have stayed relatively consistent over the course of the last two months.

And, as you would figure, the raising gas prices showed in the ETF prices for USO as well. In April and May, the fund was trading at more than $45.00 per share. When the market truly spiked in 2008 though, which is where we could be heading just in the next six to eight weeks, the top price range for USO stock was around $119.00.

If you’re an investor that is looking for a riskier investment in a stock that pays dividends, we recommend Diamond Offshore Drilling, Inc. (NYSE Symbol: DO). Diamond Offshore drilling has paid a rather consistent dividend of around $0.75 per share every quarter, and it is currently being traded at $64.10 per share. Again, in April when gas prices were around $4.00 per gallon, DO was trading up near $80 per share. In 2008, not only was the dividend high at $1.25 per share, but the price was up over $140 as well.

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The truth of the matter is that banking on oil stocks is, if nothing else, a hedge against your own personal finances. If the value of your oil investments go down, theoretically, you should be paying less at the pump and on your utilities. If you’re paying more at the pump, the value of your investments should be going up as well. Barring having an insane amount of money tied into stocks like these though, the cost of living will always be more dramatic than the price of your investments.

The warning with crude oil is that the price does fluctuate quite rapidly. These are the types of funds in which timing is everything. Just because prices are high does not mean that they won’t raise further, and vice versa if prices are lower. We do think that oil prices will hit their peak in January or February of 2012, but until that point, you are going to want to buy oil stocks and funds and reap the benefits, though remember that you’ll be paying more, and in some cases, a lot more at the pump.