by Travis Johnson, Stock Gumshoe | February 28, 2014 9:52 pm
This is premium content. To view this article (and to have full access to the rest of our articles), sign up. Already a member? Log in.
Source URL: https://www.stockgumshoe.com/2014/02/february-idea-of-the-month-oil-services/
Copyright ©2024 Stock Gumshoe unless otherwise noted.
Thanks for the updated Irregulars Core, Speculations and Watchlist lists. One thing though – you say “I feel a lot better about NOV or Apple (AAPL) or Berkshire Hathaway (BRK-B) or even our favorite REITs (like COR, MPW and ROIC). ” Have you considered putting MPW into one of these categories? It seems like as ‘solid’ a stock as ROIC and COR.
Yes. Maybe should categorize them a bit, I do consider MPW similar to those other REITs in quality, but haven’t followed them as closely for as long.
Travis As to soapbox I thank you and agree. Belief is no guarantee of investment success. We avoid making mistakes thru our experience. We gain experience by making mistakes.
What are the advantages for an IRA? I’ve been thinking of changing my IRA to include stocks. Thanks for any tips on this matter. Ty
Thanks Travis! Like your idea of the month NOV and will add on my ‘watch-list’. Also have been very happy and successful with SDRL. Noticed a certain pattern. SDRL seems to move between the lower 30’s to mid 40’s. I have been able to go in and out of it around those areas a few times. Recently bought in again around $34-35 and will be closely watching how SDRL hopefully moves up again. Of course, this makes only sense when you are using an IRA account.
See Reply above please.
TY: The advantage of IRA account is that you do not have to pay taxes on each move you make. If you trade in and out of a certain stock like SDRL for example in a regular account you have to pay taxes for the gains you make from the trade. At the end of the year all those gains and losses will be added up and you have to pay taxes on these trades. In an IRA account you can trade as much as you want and your gains are not relevant by the end of the year. The tax has to be paid only when you take money out of the account upon your retirement, I believe. But that is not a big problem because you won’t be earning very much and then you can take you money out of your IRA account without any taxes. Hope that helps!
Any stock broker should be able to set you up with an IRA account
With very little hassle. Any of the major discount brokers is likely to do it
for a nominal fee and give you a number of commission free trades to boot. They
love IRA accounts.
Travis,
Thanks for the write-up and voice of support for NOV. I bought it about a month ago only to see it promptly drop about 10%. Not enough to get too worried but as everything around us went up, it kind of hung there. Support for the stock came out in Barron’s, a couple of brokers and a couple of newsletters so it’s beginning to look like there’s a party starting.
another highly speculative compliment to nov is mdr that is going to be at rock bottom
after a dicey cc today.
Travis as something a little different what do you think of TRP as an LNG pipeline play for keystone & BC,Prince Rupert combo?
I’ve liked Pembina for a long time but haven’t looked at TRP lately.
I appreciate this article much, because NOV is on my watchlist.
But recently I have some doubts about the future of the ‘Big Oil Industry’ Why?
1. The trend of super light cars (BMW Carbon Fiber!) = light cars consuming less fuel
2. Alternative energies
3. Machines of any kind which are consuming less energy.
etc…
To get me right I don’t exspect the the big oil companies will disappear but will there be any more growth in the future for them?
One good example we have in Germany.
RWE was the biggest energy supply company in the country.
Yesterday they have reported the first loss in the companies history.
The stock and the bonds of the company have been safe in the past like government bonds.
In the last 2 years the stock price has halved and the bond always rated with A are now BBB+
Any comments maybe I am wrong
Peter; You are correct in what you say & nobody knows what lies ahead in the volatile political climate we now face. Please consider this, trucks are about as efficient as they can be made & there is no real substitute for liquid fuel. In the last part of trip at least everything travels by truck. Alternative energy still has many problems & probably cannot supply more than 10% of needs for next 20 years. Agriculture is energy intensive in many ways ,fertilizers, plastics in food processing & fuel for planting & harvest must use oil & nat gas. Electric generation is swinging to Nat gas & must have it until/if reactor generation becomes prevalent. A great deal of hydrocarbons are necessary somewhere in the production of alternative energy. Governments all over the world take in more $$$ from oil & gas than “fatcat bigoil’ keeps, through various taxes royalties,etc. where/how do they replace the funds? What do you think of future?
FYI, speaking of Bitcoin, Alex Daley over at Casey published a nice piece on his opinion of Bitcoin — I found myself agreeing with much of what he said, though as I noted above I have pretty much gotten entirely out of bitcoin now because I can’t see a level that represents any fundamental value, or a reason for putting this money at risk.
Here’s his piece: http://www.caseyresearch.com/cdd/bitcoins-uncomfortable-similarity-to-some-shady-episodes-in-financial-histo
Thanks for the NOV suggestion, Travis, I’ve been thinking about getting back into it.
I’m sure you don’t need more energy ideas to sift through, but, what the heck, I’ll throw them out there anyway. I’m a multi-year holder of Energy Recovery (ERII) and Lightbridge (LTBR) and both have pulled back from recent tears.
ERII just had their conference call and had their best quarter ever. They own 90% of the energy recovery market for salt water reverse osmosis (SWRO) desalination. Desalination megaprojects, which had faltered with the world economy, are coming back and long-term prospects are bright. The money Energy Recovery put into the materials science of making their own high-tech ceramics is now paying off with higher margins for their devices. What’s most exciting, though, is that they have made their first sales into the oil and gas market, where high pressure refining techniques are standard and their devices can save millions in energy costs.
I’d encourage anybody to read the CC transcript (http://seekingalpha.com/article/2072573-energy-recoverys-ceo-discusses-q4-2013-results-earnings-call-transcript). ERII has pulled back after a 40% post-earnings rise on very high volume. One broker downgraded the company because of concerns about ERI’s refusal to provide quarterly earnings guidance. I plan to buy more with any further correction.
I wrote about Lightbridge a few years ago for your silver dollar contest (http://www.stockgumshoe.com/2011/12/microblog-a-nuclear-power-uprate-for-your-portfolio/). They make an all-metal uranium fuel rod as a drop-in replacement for standard Western pressurized water reactors that has two major advantages over current uranium oxide pellet rods. First, the reactor can operate at more than 1000ÂșC cooler temperature because of more efficient energy transfer to coolant (metal conducts heat better than ceramic). The increased safety margin is significant. A Lightbridge fuel assembly (probably) would not melt-down in a Fukushima-style loss-of-coolant accident and would not heat up enough to cause the zirconium cladding-induced pyrolytic reduction of water to explosive hydrogen gas. Second, because of the increased efficiency, reactors can produce up to 30% more energy from the same reactor (new-build; 15% increase in existing reactors).
LTBR shares have doubled this year on consistently higher volume. I suspect they will pull back as there are no clear, immediate catalysts and full-scale testing in a commercial PWR is still about three years away.