4 Top Energy Stocks You Need To Own
Today's Financial News - Posted August 11, 2009
We’ve found four timely energy stocks to fuel your portfolio. Each and every one has the potential to easily reach 20% gains in the next 6 months.
by The TodaysFinancialNews.com Team
Baltimore, MD
Top Energy Stock #1: It’s a gas
While oil has surged, its energy companion has remained relatively cheap. There are few energy experts that believe the trend will last much longer.
Natural gas prices will rise.
When they do, Chesapeake Energy Corporation (NYSE:CHK) with its immense reserves, will do exceptionally well.
And this investment allows us to effectively go short against the American dollar and go long the energy industry.
But even if we get it backwards and the American economy suddenly flourishes, Chesapeake’s shares will naturally follow the overall market.
Opportunities like these that rely on a handful of unique economic forces falling in line do not come around all that often.So when they do, we had better take full advantage of them.
*** Buy shares of Chesapeake Energy Corporation (NYSE:CHK) below $28.
Top Energy Stock #2: The next “super fuel”
This one may surprise you…
Coal (to the misery of its detractors) has been one of the best performing industries this year.
Coal-fired plants generate more than half of the electrical power needs in the U.S. and this fossil fuel will play a vital role in the global economy for decades, if not centuries, to come.
Thanks to new technologies, coal can be burnt in an ultra-efficient, super-clean process. It can even be used to make the fuels that power our cars, trucks, trains, and planes. Coal is the next “super fuel.”
One company poised to take advantage of any growth in the coal-producing industry is James River Coal Company (NASDAQ:JRCC). And as I write, you can get your hands on shares for just less than $20.
In June last year, they would have cost you over $60.
There are two important facts to understand about the coal industry…
First, there’s a global coal shortage. Demand far outstrips in much of the world. China, India, Australia, and Russia are desperate to get their hands on more. Fortunately, the United States has over a quarter of the world’s coal supply.
The second thing you need to know is that once a coal-fired generating plant goes online, it can’t afford to shut down. It’ll need a continuous supply of coal for decades to come. It’s just the opposite of nuclear-operated facilities. A nuke plant only needs fuel every twenty years or so. Coal plants are addicted to fuel.
Combine a nearly constant demand stream with a lack of supply and every economist will say you have a perfect recipe for profits. Throw in a stock price that has been unduly beaten down because of unfounded fears of an industry slowdown and you have an opportunity to score big time as share price rebounds.
*** Buy shares of James River Coal Company (NASDAQ:JRCC) under $20.
Top Energy Stock #3: Let the sun shine in
Imagine how much money a construction company would save if it could find a way to substitute a thin sheet of concrete for a 10-inch-thick retaining wall. The sheet would be just as strong as the concrete slab, even though it was only one-fifth the weight. It would still support a 10-story building, but it would require only a small percentage of the concrete in a traditional wall. Now imagine that the technology to create that magical wall exists and it’s cheaper than conventional building methods.
That’s exactly what’s happening in the solar industry right now.
The wasteful and expensive traditional method for creating solar cells is being eclipsed by a new and cheaper process that’s energy- and silicon-efficient.
Evergreen Solar, Inc. (NASDAQ:ESLR) is at the front of this new wave. The Massachusetts-based solar-cell manufacturer cuts down on cost by creating thin, but durable, silicon films to put in its cells.
Evergreen Solar starts out with the same silicon that all solar module manufacturers use. But instead of chopping up that silicon into thin slices and slapping those into a cell, Evergreen uses its proprietary String Ribbon technology to blow bubbles.
Think of dipping a bubble wand into a bottle of liquid silicon and pulling it out with a viscose, liquid skin spread across it. Now replace that wand with two parallel heated filaments and the bottle with a big vat of melted silicone and you get the idea. Evergreen drags the filaments through the vat, and, voila, it has a thin and uniform sheet of silicon spread across it.
After it cools and solidifies, the silicon suspended between the filaments looks something like a strip of very large camera film. And the company can substitute this flexible skin of silicon for the thicker, harder slices normally used in solar modules.
Evergreen’s proprietary String Ribbon technology is a much cleaner process than traditional wafer production. It uses less energy. It doesn’t waste silicon. And it’s cheaper than normal silicon processing for solar uses.
Evergreen constructs its own solar modules using String Ribbon technology and sells them to installers around the world, everywhere from Florida to New Zealand, and a few places like Slovenia and Germany in between.
The company’s modules are used to power DuPont’s research center in Hawaii. They’re currently keeping the alumni pool at MIT warm and cozy. And Germany’s Ralos installed Evergreen modules on 1.7 miles of the country’s A3 highway to build the world’s first electricity-generating interstate tunnel.
Evergreen has a stable customer base. And its cost-effective products will woo new clients away from competitors. This is a strong company with an even stronger product.
*** Buy Evergreen Solar (NASDAQ:ESLR) at or under $2.50 a share.
Top Energy Stock #4: The best oil play around
Total S.A. (ADR) (NYSE:TOT) acts as the big brother to the entire European energy-producing industry.
This is a $130-billion, French-based conglomerate that has all the capital and power it needs to become a global dominator as Europe’s energy supply chain suddenly breaks.
TOT as was a $90 stock in June of 2008. It’s trading around $53 as I write. And it could be a $150 stock if crude prices continue to move and the EU is afraid of becoming too dependent on Russian energy imports.
Think of Total as a football team’s back-up quarterback. With Russia in control of Europe’s natural gas supply, it’s forced to sit on the sideline and watch the game unfold.
But as soon as Russia is checked, Total will run in and take the crowd by storm. It has everything it needs to be a continental dominator: The company has operations all across the globe, but is strategically positioning itself to take advantage of growth in Western Europe. It has operations in all of the key countries mentioned above.
But even better, it has a huge downstream business that will soar in value as Russia battles with the west. Just like it did last winter!
Total has enormous amounts of refining capacity: Over 2.5 million barrels per day. In fact, it is the largest refiner in Western Europe. Even more important than Total’s industry-leading refining capacity is its ability to produce unfathomable amounts of natural gas.
During the third quarter of 2008, the company pumped the equivalent of more than four billion cubic feet of oil each day.
Total has staggering amounts of production capacity. At current levels of demand, the company has more than enough supply. But when Moscow gets aggressive and closes its pipelines, European demand will go through the roof. That means Total’s natural gas will sell for a premium. Its shareholders will get rich.
Sarkozy is hell-bent on making France the predominant player in the European Union.
France is all about advancing the interest of French industry. That means that Sarkozy will leverage the current crisis to the exclusive benefits of French companies. And the main beneficiary is Total.
*** Buy shares of Total (NYSE:TOT) at or below $58.
Next Article: Use the ETF market to “mine” commodity profits
4 Responses to “4 Top Energy Stocks You Need To Own”
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August 12th, 2009 at 9:26 pm
Is it okay now to invest in the automotive industry again? I think that the industry is still in shaky ground up to now.
August 25th, 2009 at 8:33 pm
Dude.
Every time I come to your web site via a link from the daily newsletter I recieve
(Which by the way is always an insightful read.) the graphics are out of sync, skewed or otherwise hard to make out. Do something it’s annoying.
Thanks,
Bill Lessard
August 27th, 2009 at 11:36 am
Hello Bill: Could you advise what browser you’re using? Thanks!
September 7th, 2009 at 1:01 pm
I will try some of these picks if they do well I will join your service,you have a great holiday,and again thanks? Also thanks for your in site on things.