TFN eNews 10/09/2009: Our Top 3 Penny Stocks
Published via e-mail broadcast on October 9, 2009
In today’s TFN eNews:
* The Russians are coming
* Good for the dollar
* Free new penny stock report
Dear TFN eNews reader,
Every now and then, mostly during long-distance car trips, I see a Lukoil gas station on the side of the highway.
Nine years ago, in 2000, the Russian oil explorer, refiner, and distributor had purchased Getty Oil and converted a small number of Getty stations in the United States to the Lukoil brand. In 2004, the Russians bought out the owner of the Mobil stations in New Jersey and Pennsylvania. (However, since Lukoil sold gas at roughly the same prices, most Mobil franchisees in the area did not convert their stations.
From my perspective, Lukoil’s (OTC:LUKOY) great American adventure has somewhat fizzled. The stock’s doing fine, everything considering. But it has nothing to do with Lukoil’s share of the American market.
Now Russian state gas monopoly Gazprom OAO (OTC:OGZPY) plans at cutting itself a 10% share of the U.S. natural gas market — by 2014.
Gazprom, which has a stranglehold on Europe’s natural gas supply, has been called the Kremlin’s foreign policy arm. It’s revenues are the backbone of the Russian state budget. And it keeps its own armed forces to secure its gas pipelines.
The company plans to use liquefied natural gas from its Sakhalin-2 project to supply U.S. customers. Down the road, OGZPY could send LNG from its Shtokman field to the North America.
Gazprom eventually aims to control a quarter of the world LNG market by 2020.
Given the current levels of natural gas prices, Gazprom’s U.S. strategy seems timely. U.S. natural gas producers are struggling: The price of natural gas is now at about $3.70 per 1,000 cubic feet, which is the break-even point for drilling a new Marcellus Shale well. According to the Energy Information Administration (EIA), there was 3.899 trillion cubic feet (tcf) of working gas storage capacity in the United States in 2000. As of Friday, October 2, working gas in storage was 3.658 trillion cubic feet — that’s dangerously close to full levels!
Plus, there are huge amounts of gas about to flood the market as the cheaper Marcellus Shale is tapped: Total production of U.S. gas from shale predicted at year end 2011 will be nearly eight times greater than at year end 2006! The Woodford, Fayetteville, and Haynesville gas production are currently increasing greatly while the Marcellus shale is not predicted to really take off until about 2010.
With so much supply and producers operating on razor-thin margins, Gazprom’s strategy may involve large-scale buy-ups of distressed domestic producers — preceded by aggressive price wars.
Good for consumers. And good for the last capitalists that will be operating on American soil by then. (Too bad they’ll be Russian…)
TFN financial oracle Andrew Snyder writes: “My take is that Russia realizes that America has a huge supply of natural gas. With too much for us to use, we’ll be forced to export natural gas to places like Europe. By getting a stake in our market, Russia will be able to get its gas cheaper than it can produce it in Asia. Could be an interesting move to watch.”
In confidence, he told me he’s right now putting the final touches on a gas-based options strategy. I wouldn’t be surprised if he had more to say about this next week.
*** “The numbers may not show it, but this was a huge week for investors,” writes Andrew on our news hub this morning. “As the dollar weakens, a host of things are happening behind the scenes. The trading opportunities are enormous.
“This week, it was all about the dollar. The weaker it gets, the stronger the trading potential. The falling dollar was fantastic news for gold bugs. In fact, almost the entire commodities complex benefited from a weaker greenback. The one notable exception was natural gas. With an immense supply glut and little international trade, the abundant fuel was the one major commodity to decline in value.
“Even the equities market managed to shrug off America’s declining economic superiority, surging ahead on a surprisingly strong earnings report from Alcoa (NYSE:AA) and an investment community that is trying to dump its cash stockpile before it declines in value any further. The big question looking forward is will the buck’s decline continue? Is it soon going to take $1.50 to buy a euro?
“There’s evidence for both sides of the argument today. If the Asian countries that depend on a strong dollar to increase their export profits get their way, the greenback will turn around and strengthen once again…”
Read more here: http://www.todaysfinancialnews.com/investment-strategies/a-huge-week-for-the-greenback-10152.html
*** “Penny stocks can just draw you in,” writes TFN’s Laura Cadden. “They’re so cheap, so unassuming. Just a small investment can get you so many shares that you feel like investment royalty. Until that is, one tiny little news article sends the share price plummeting.
“And that’s the thing about penny stocks, a drop of 10 cents can happen in minutes, equaling perhaps a 30% loss on your investment. The flip side of that volatility is that you can bank fast 30% gains on just a rumor.
“Now, that’s not the way we like to do business here at TFN. We base our investment recommendations on what we believe to be companies with solid potential. That said, we’re not averse to taking 30% gains whenever the chance arises!”
That’s why Laura compiled a new free special report for TFN users. Get it while it’s hot: http://www.todaysfinancialnews.com/investment-strategies/todays-top-3-penny-stocks-10144.html
*** “Ridiculous” stock picking strategy generates 65 double-digit winners in the first 9 months of 2009!
*** Quote of the Day:
“Mr Obama becomes the third sitting US President to receive the [Nobel Peace] prize. The committee said today that he had ‘captured the world’s attention’. It is certainly true that his energy and aspirations have dazzled many of his supporters. Sadly, it seems they have so bedazzled the Norwegians that they can no longer separate hopes from achievement. The achievements of all previous winners have been diminished.”
– Michael Binyon, London Times
Recommended Reading:
Q4 Update: TFN Complete Guide to Stem Cell Stocks under $10
The 3 Best Stocks under $3 to Buy NOW!
Today’s Top 3 Financial News Stories:
NPR.org – U.S. Trade Gap Narrows As Exports Rise “The Commerce Department said Friday that the trade deficit shrank 3.5 percent to $30.7 billion, surprising economists who had expected higher oil prices to push the imbalance to $33 billion. Oil prices did shoot up, but the volume of shipments dropped sharply in August.”
Bloomberg.com — Russia’s Fibonacci ‘Breakout’ Signals Rally: Technical Analysis “Russia’s Micex Index surged yesterday above the halfway point between its all-time high and its bear- market bottom, a signal shares may climb another 27 percent, according to Auerbach Grayson & Co.”
Reuters.com — U.S. gold takes breather as dollar rebounds “U.S. gold futures took a breather on Friday as a dollar bounce prompted pre-weekend profit-taking following this week’s sharp rally to the previous session’s record high above $1,060 an ounce.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
Next Article: China small-cap powerhouse: 3,900% gains!
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