Blog > TFN eNews > TFN eNews 08/18/2009: The most under-rated action in the world’s energy sector
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TFN eNews 08/18/2009: The most under-rated action in the world’s energy sector

Published via e-mail broadcast on August 19, 2009

In today’s TFN eNews:

* Sinuvac reports swine flu breakthrough

* Paying your credit card bill with the gains on 1 HSC recommendation

* China’s commodity carry trade ogles LNG

Dear TFN Reader,

I should’ve seen it coming.

When I asked Bin Lu, my Chinese fencing coach, earlier this summer if he’d be embarking on his annual pilgrimage to China this summer, he seemed dubious.

“Afraid they put me in quarantine,” he said. “Swine flu.”

His lack of enthusiasm seemed perfectly reasonable: A volleyball team from my son’s high school spent most of their trip to China locked up in a Beijing hotel. And the Kawasaki delegation of Japanese scouts that part of our Boy Scout troop had been preparing to host for the better part of a year canceled their visit for fear of the porcine virus.

So I knew I was facing a turning point last night when I heard that Coach Bin had left for Shanghai, sticking me with a bunch of kids signed up for fencing lessons on Thursday night.

The news today confirmed my suspicions: Sinovac Biotech Ltd. (AMEX:SVA) has developed a swine flu vaccine that is now officially considered safe. According to reports, it protects people after a single shot.

Inoculation has caused no severe adverse reactions in the 1,614 volunteers who received it, according to the company.

“The results are the first reported anywhere in the world on a vaccine to fight the new H1N1 strain that’s sparked the first influenza pandemic in 41 years,” said the company.

Of course, these numbers probably will have to undergo some review and accreditation process. But with U.S. vaccine manufacturers already behind schedule producing the amounts of vaccine ordered up by the U.S. government, it means Sinovac is aiming for the inside track on the world H1N1 vaccine market. Be it only on the public relations side.

The stock rose over 10% today. Keep an eye on it… if U.S. manufacturers are not catching up, this one may be a medium-term winner, even at current levels.

*** Speaking of Chinese pharma stocks:

Last week, Laura Cadden closed out her refined refiner position of Sunoco, Inc. (NYSE:SAH) via stop loss at 20% gains. That was double-digit gainer #44 so far this year. (Which so far works out to about 5.5 gainers per month for HSC readers…)

But that’s really just for our official book-keeping. We know most of our HSC members are seasoned investors who may not need our constant hand-holding — but are looking to our team for investment ideas.

Which means that you can take profits on anything as your darn well please. Just like HSC member Sandra M., who wrote us this morning regarding one of the four “proxy stocks” we had recommended just a few weeks ago:

“Thanks for XYZ. I took my profit at 20% gain which paid my credit card bill this month. Thanks, Laura! Looking for a dip to get back in.”

That’s the spirit! Making money on HSC picks, even without us having to say a single word.

By the way, the -18% drop in the Shanghai market since August 4 has opened up some great buying opportunities for all four of our Chinese pharma stocks. I’m just saying… you might just want to re-read my initial report.

http://www.todaysfinancialnews.com/HSC/PROXY/EHSCK801.html

*** Fun Numbers Fact of the Day, Twitter-ready: -638 points. -18.34%. What’s the amount the Shanghai stock index has lost since Aug 3. But the trend is reversing. And we picked the best 3 China stocks.

(You didn’t seriously expect we’d twitter without being self-serving, did you?)

*** “The world’s liquefied natural gas (LNG) industry is on fire, yet few folks are talking about it. No matter what corner of the planet you look, billion-dollar deals are getting signed all over the place.

“It’s even more proof of China’s growing demand for global commodities. Hitting the wires this morning is word of a $41 billion deal between Exxon Mobil (NYSE:XOM) and the world’s second-most-valuable oil firm, PetroChina (NYSE:PTR).

“For any investor following the up-and-down world of planets LNG sector, today’s announcement is more proof of the industry’s vital role in the future of energy.

“The huge Australian gas field known as Gorgon is operated by Chevron (NYSE:CVX), which owns 50% of the field. Royal Dutch Shell (NYSE:RDS.A) and Exxon share an equal proportion of the remaining stake. Exxon has fully monetized its position, thanks to today’s deal with China and the recent contract announcement with India’s Petronet LNG.

“PetroChina has signed on for a sizeable chunk of the field’s 15 million tonnes of annual output. It will buy 2.25 million tonnes per year from XOM for the next two decades. And it will get another 2 million tonnes from RDS during the same period.

“This is possibly the most under-rated, least-discussed action in the world’s energy sector! First, it proves my take on China’s ‘commodity carry trade’ was dead-on accurate. The country is doing everything it can to gain access to foreign commodity markets and their respective currencies.

“Chinese companies have been all over Australia in recent months. Don’t let the Rio Tinto (NYSE:RTP) deal steal all of the attention. China and Australia sure have not let it get in their way of forging new business deals. The two countries desperately need each other.

“The latest news also proves that LNG is a fuel of the future. With crude prices in high territory, yet below many drillers’ profit threshold, there’s more than enough proof that crude production is getting more and more expensive and new discoveries are thinning out. Fortunately there is no shortage of natural gas. But there is a shortage of viable forms of transporting the vital fuel source in its liquid state, a necessary method in locales without pipelines.”

What LNG company does Andy recommend? Find out right here!

Quote of the Day:

“Blaming a cabal of conspirators — a time-honored technique for leaders on the wrong side of public opinion — is paranoid and self-defeating. More importantly, it betrays a tin ear to the culture of most Americans — an independent, optimistic culture that is mistrustful of government nannying and intolerant of policies that mortgage our future.”

– Arthur C. Brooks, WSJ.com

*** 44 double-digit gainers for HSC members in 2009.

And that’s just the ones we’re keeping track of:

“Thanks for [Chinese Proxy Stock XYZ]. I took my profit at 20% gain which paid my credit card bill this month. Thanks, Laura! Looking for a dip to get back in.” — HSC Member Sandra M.

Recommended Reading:

China sets the LNG industry on fire

New Special Report: The 3 Best Chinese Stocks Under $5!

4 Top Energy Stocks You Need to Own

The TFN Complete Guide to Biotech Penny Stocks

Today’s Top 3 Financial News Stories:

Newsmax.com – Dohmen: Economic Recovery A Paper Tiger “Following the sharp correction he foresees in September, Dohmen expects this paper recovery will create the illusion that the recession has ended. ‘People will fall over each other to buy stocks in the last quarter,’ he says, adding that he expects the enthusiasm to wear off very fast when the recession dips sharply again in 2010.”

Bloomberg.com — Global Stocks Advance on Target Earnings, German Confidence “U.S. and European stocks advanced and oil and industrial metals climbed following better-than- estimated earnings at Home Depot Inc. and Target Corp. and an increase in German investor confidence.”

WashingtonPost.com — New Home Construction Unexpectedly Declines in July “Housing starts fell by 1 percent from June’s level, to an annualized rate of 581,000. compared with June Construction was down 37.7 percent from a year earlier.”

Cordially yours,

J. Christoph Amberger

Executive Publisher, TodaysFinancialNews.com


Next Article: Three winners: More big moves from little companies

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