“The Best Energy Stock You Can Buy” (Kent Moors) — plus a bonus (second best?) pick.

"Growth of 11,100%" and another Teaser Pick from the "Energy Inner Circle"

By Travis Johnson, Stock Gumshoe, July 14, 2011

Hyperbole is the coin of the realm in teaserdom, of course, but even so — when you headline your emails with a phrase like “best you can buy,” your friendly neighborhood Gumshoe is going to take notice. And some of his favorite readers are, too, if my inbox is any indication.

So it goes today — Dr. Kent Moors, a poli sci professor at Duquesne who runs a couple energy-focused newsletters for the Money Map folks, is telling us that he’s got a stock with projected growth of 11,100% (numbers from analysts, he tells us, not made up out of thin air as with some teasers) and, well, that it’s the “best energy stock you can buy.” And if you want to shell out $695 for his newsletter, he’ll share all the details with you.

You don’t though, right? Well, it’s up to you — maybe you’ll love his newsletter … but let’s figure out what stock he’s teasing first so you can make a thoughtful decision based on facts (or reviews — we don’t have any reviews of his pricier Energy Inner Circle yet, but do have some of his “entry level” Energy Advantage newsletter here), not just to find out his “best energy stock.”

So what is this pick? It’s a play on the “natural gas super shift” — sort of a bigger picture version of the pitch that David Gardner at the Motley Fool has been making for his favorite LNG engine maker lately, the basic idea being that the world is switching from dirty, scarce oil to clean, plentiful natural gas (both being exaggerations, of course … but you get the idea).

And actually, Moors even cites the natural gas bill in the House of Representatives (HR 1380) as a catalyst, just as David Gardner has been doing lately …

“Every single minute America sends $1,388,889 to some of the nastiest people on the planet, in the name of national security.

“That’s a staggering $2 BILLION every single day.

“Has Congress finally had enough? It sure looks like it…

“House Resolution 1380 is about to put the brakes on that ridiculous outflow of YOUR money in one, massive, energy move that could result in the biggest energy/transportation breakthrough since the Model-T.

“Those who play the inside moves behind this “super shift” stand to become wealthy as Texas oil barons

“The 50 or so global power brokers who control 90% of the world’s energy are already licking their chops.

“This elite Inner Circle has zeroed in on one company perfectly poised to siphon off this $2 Billion-Dollar-a-Day cash outflow that the U.S. government is about to redirect their way.”

And that “one company” that’s “perfectly poised?” Don’t worry we get plenty of clues to toss into the ol’ Thinkolator today:

“This company stands to become one of the biggest blockbusters of the decade. According to analysts at Yahoo Finance, this powerful little company is estimated to grow in size by 11,100% this year… ”

So there’s one clue. And what kind of company is it?

“How to grab your share of this $2 Billion/day transfer of wealth

“Many people may read this as a signal to jump on natural gas. The gas itself. But only a fool would do that.

“Natural gas is already cheap. And it’s getting CHEAPER. There’s no way you can make the mammoth gains in that scenario.

“The really big money will be made NOT on the gas… but on the few, elite companies positioned to capitalize on the SHIFT to natural gas.

“These are companies who 1) have the technology to make and convert natural gas engines, or 2) are leaders in transporting and supplying the new demand for natural gas to the masses. And they could soon virtually explode with profits.”

And then some more specifics:

“As the coming super shift to natural gas heats up, the need to economically transport NG to the masses will become essential – and a remarkable investment opportunity.

“The LNG revolution – transforming the gas into a liquid and shipping in tankers, turning it back into a gas on the receiving side, and then injecting it into existing pipeline networks for delivery to retail customers – is already becoming one of the most important developments in hydrocarbons worldwide.

“And it’s poised to grow exponentially with the coming NG super shift as natural gas is transported around the world.

“For that to take place, two unit types are required: 1) tankers and 2) floating storage and regasification units (FSRUs).

“The first is obvious – no tankers, no LNG trade. But the second is just as important.

“To increase efficiency and decrease the likelihood of accidents impacting upon wider populations in shore-based storage facilities, countries are shifting to offshore supply storage and regasification. FSRU is a critical technology for that to happen.

“Along with having its own expanding tanker fleet, one company also happens to be the leader in FSRU technology. In fact, they pioneered it.”

So that’s pretty good — and probably enough to identify the stock. But to make things a bit easier on this lovely sunny Thursday, perhaps to give your friendly neighborhood Gumshoe time to go out and water the apple trees, we get a few more specifics:

“The company’s current fleet consists of 12 tankers, with additional vessels coming online. Its fleet has an overall capacity of more than 1.7 million cubic meters, making it a major factor in a rapidly developing energy sector.

“Most of the company’s revenue stream comes from deploying its tanker fleet on time charters – essentially, long-term contracts – to some of the largest LNG producers in the world.”

So who is it? Toss all that into the waiting maw of the Thinkolator, chew for a moment, and out the other end (gross!) comes … Golar LNG (GLNG)

Golar is an old shipping company, but in its present iteration it was really created by Norwegian shipping magnate John Fredriksen (who also build Frontline into the world’s biggest oil tanker company, and Seadrill into one of the biggest operators of high-spec deepwater rigs) about ten years ago, when he took over control of the company.

It was, at the time, a small LNG shipping fleet, most of which was quite old (1970s and 80s) — and at the time, LNG ocean shipping was a small enough market that there wasn’t really a “hot” spot market for available tankers, so most of them were on long-term charter to big oil companies for specific routes, mostly serving what are still the world’s most important LNG customers, Japan and South Korea (LNG is liquefied natural gas, gas that’s super chilled and pressurized to make it feasible to transport it long distances via specialized tanker, and it’s the source of most of Japan’s natural gas since they have no real resources within pipeline distance).

Now, however, the LNG market has been slowly growing for a while — and there’s even talk of the US, with our huge shale oil resources, becoming an energy exporter for the first time in a very long time (OK, we do export some oil and gas now — but not much, and you need special permission to export). That, along with increasing demand in Southeast Asia and Japan, and particularly with the very large spike in demand following the Japanese earthquakes (they need lots more nat gas if they can’t use their nuclear plants), has brought LNG shippers to the forefront of investor attention again. And since they’ve been playing this game for a while and were pretty well positioned to grow with the industry, Golar specifically has done very well this year.

And yes, if you look in the analyst forecasts in Yahoo Finance, you will find that they are expected to grow earnings by 11,100% this year — that’s because they earned one penny per share last year, but analysts expect them to earn $1.12 in 2011.

Of course, analysts have been wildly off on their Golar estimates for the last four quarters — GLNG has come in well below estimates every quarter — so you need some faith to believe that estimate will turn into reality. And 11,100% earnings growth is not the same a stock that’s likely to go up by 11,100% — after all, GLNG trades in the high $30s right now, certainly investors expect them to earn a lot more than last year’s one penny.

If they do (against all odds) hit the estimate right on the head and earn $1.12, that means the stock is trading at a current year estimated PE of about 33 and an estimated forward PE on 2012 numbers of about 22. So it’s not cheap based on earnings, it’s all about whether you think it will grow fast enough, or pay a high enough dividend, or see book value increase enough (or whatever) to justify the relatively high price, which is in part driven by the the big LNG “story” of the first half of this year (earthquake scary, nukes bad, need more LNG for electricity in Japan and elsewhere).

Like most Fredriksen-affiliated companies, Golar has also delighted in debt, dividends, and financial engineering to increase shareholder value — so they pay a decent dividend, and the company split into two entities in 2009 (Golar and Golar Energy) to provide a stable pick and an aggressive growth pick, but then rejoined the two companies this year and instead has split off some of their Floating Storage and Regasification Units (FSRUs) and LNG Tankers into an MLP, which they control. So if you prefer what is likely to be a higher and more stable yield, you might also prefer to take a look at Golar LNG Partners (GMLP) — though GLNG still holds 2/3 of that MLP and is the operating and general partner, with special incentive distribution rights, so that might be more appealing as you dig into the details (I haven’t).

Golar issued their first quarter earnings release at the end of May and you can see it here — included are some good details about this combination of Golar LNG and Golar LNG Energy and the subsequent IPO of the MLP. The company is optimistic that the rate environment for their equipment will be good going forward, with “improving fundamentals” in the market, and they also have several older LNG tankers available for conversion to FSRUs that might add to the future profits — and like all Fredriksen companies, they are likely to be quite aggressive, which means buying up shipyard slots to expand the newbuilding fleet (they already have a half dozen more tankers coming over the next three years).

I don’t know what the dividend will be for either GLNG or GMLP going forward, but the aim of most of their sister companies in the past (FRO, SFL, SDRL) has been to distribute essentially all of the earnings to shareholders and to use debt for growth — wouldn’t be surprising if that continued to be the case. I have looked at GLNG several times in the last few years and never bought the shares, and frankly I’m not sure I understand the company that well after their two reorganizations and my limited look at the books today … but I do hold shares of Seadrill and continue to think it’s the strongest deepwater drilling stock for aggressive investors.

P.S. Moors teased a second stock in the same ad — here’s a quick excerpt:

“Rake in gains as the world is driven to one company that is already the global leader in NG engine technology

“The main obstacle to the wholesale switch to NG vehicles has been so far… well, how to make that switch… From gasoline to compressed natural gas (CNG) or liquefied petroleum gas (LPG). And how to do it both efficiently and cost-effectively.”

Not to belabor this point, but here he’s teasing the natural gas truck engine builder Westport (WPRT), the same pick touted by David Gardner a couple months ago and by other folks this Spring, and that I’ve written about many times for the Irregulars. So that’s your little bonus for the day.

Full disclosure: as noted above, I own shares of Seadrill personally and have profiled both Seadrill and Westport for the Irregulars. I do not own any of the other stocks mentioned, and won’t trade in any stock mentioned for at least three days after publication of this article.


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30 Comments on "“The Best Energy Stock You Can Buy” (Kent Moors) — plus a bonus (second best?) pick."

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CGM
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CGM
July 14, 2011 2:02 pm

I reached basically the same conclusions on what stocks were being teased and that they are too expensive at this point to buy. I did make some good money on Frontline years ago. Fredrickson is a smart guy, but FRO has been hurting for a while.

Tim
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Tim
December 1, 2011 12:48 am

HI, I just recently found this website a friend and I have been looking at doing some investing.. I have been following Dr, Kent Moores, for about 6 months and was considering buying his news letter, but was hesitant because he seemed to be trying so hard to sell it to me. I have checked him out on the internet. I found he seemed to tease you with a lot of information. So what is the scoop with this guy, Is he a fraud

Thanks
Tim

John
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John
May 24, 2012 11:58 am

Energy inner circle and Energy Sigma trader cost me dearly.
The first trades recommended in the Energy Circle cost me ( I lost ) appox. $1000
If I had “played” the first options trade I would be down another 40%
I canceled with the 90 day policy and found they had a 10% handling fee for doing that.
Beware………….If it sounds to good to be true it probably is 🙁

Chris
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Chris
May 27, 2012 10:28 am

John. Did they honour the refund and paid you? Chris

silverspur
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silverspur
September 4, 2012 2:18 pm
Moors touted SATC a buy at 3.40, and it promptly sunk to less than a buck. He’s got the gift of gab. Forget the energy inner circle because it cost four times more than energy advantage. The energy advantage used to cost $49 but they jacked the price up to $129. Also, inner circle readers used to get to read energy advantage for free, but not anymore. Read Kent Moors for free at oilandenergyinvestor.com and then get Byron Kings Outstanding Investments for $49. You’ll do just as well as spending $895+ for Moors overpriced verbose advice.
ray fritsch
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February 22, 2013 10:05 am

Just viewing his Arckaringa basin pitch. Saw a graphic claiming they got 300% gains on GLNG. Look at the chart from July 11 and see if that makes sense.

greenfire67
Irregular
31
May 13, 2014 10:05 pm

Ray,
They use options to get those gains. Most everything from Weiss is options.

Ira
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Ira
July 14, 2011 2:23 pm

I've owned Golar since 2007 in my IRA, where it has doubled in that period. I am considering the MLP spinoff, largely because I own and like all the other Fredericksen companies: Ship Finance, Frontline and Seadrill. I know Frontline is down with all the other ocean shippers, but I believe it will recover more rapidly than the others. I have a hard time imagining Golar growing by 1000%, but its at least a continued hold for me now. If I were to buy more shares of any of these companies right now, they would be Seadrill and Ship Finance.

shoeless
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shoeless
July 14, 2011 3:06 pm

http://www.torquenews.com/119/chesapeake-energy-n….

This article nicely covers the current Nat Gas situation. If we could get the Rockefellers out of the oval office some of this good stuff might happen

DaveK
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DaveK
July 14, 2011 4:02 pm

There are several reviews of the Inner Circle mixed in with those for the less expensive service

Fleener
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Fleener
July 14, 2011 7:36 pm

One reason that LNG Tankers have not taken off is that if a terrorist touches one off in Boston harbor the shock wave will kill more people than Hiroshima. Dod study in the 90's

golchie2
Member
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golchie2
May 18, 2013 11:58 am

LNG is not flammable or explosive in its liquid state and requires certain atmospheric conditions when it becomes a vapor

Bob
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Bob
July 15, 2011 10:58 pm

Wonder why no one mentioned Moors article called "Fracking issue" where he talked of RRC (NYSE) having the technology for "concentric pipe streams". That sounds like proprietary technology to me. Wish I had acted when he first mentioned it Monday. RRC was up a whopping 12 percent today alone.

Ian
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Ian
July 18, 2011 4:31 pm
Kent is a novice at fogging his teases. But these 2 picks highlight something else very interesting for you sleuths. Enough, but not a huge number, of the subscribers to US boosters premium picks live in UK. They are likely to search with Yahoo finance http://uk.finance.yahoo.com/q?s= and then the stock ticker. At the bottom of the Summary page that comes up is a list of 5 other tickers for stocks also viewed by those viewing the target. Since very few UK stock pickers will latch on to any US or Canadian small cap stock it follows that the five new… Read more »
hemecity
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hemecity
July 23, 2011 7:41 pm
Belated thanks for review of GLNG (GMLP), WPRT, SDRL. Golar is a typical for these hypes which Moores et al probably bought 9/2010 for $12-13 or 3/11 for $19-20. The gains may be a 10-bagger, but it seems more realistic for me to calculate that from the low figure, i.e. target $120-130. Still very good from today's price. Some technicals on GLNG look weak to me since March, so will wait for a correction (if it comes), especially if it returns to $20 all else being equal. Fleener, thanks for the intel from DOD on dangers. Will add another downer… Read more »
chopprz
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chopprz
November 2, 2011 3:05 pm

Decent insight on the Golar forecast; 10 bagger at the initial looks realistic.

markS
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markS
July 24, 2011 9:14 am
Maybe I have a problem with self aggrandizers as Moors appears to be, but I do have some first hand experience with Energy Inner Circle as well. I paid for the service from its inception , and got my money back before the 6 month refund kicked in.at the end of April. This quote about the service came in my email box just yesterday from the publisher touting the Inner Circle with these words : " Right now, 12 of Kent's recommendations are up by double digits. Two of them have already doubled, actually. And just last week, when Kent… Read more »
markS
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markS
July 24, 2011 9:20 am

None of the numbers they tout look to be true unless you had some spectacular good time for some short term trades he was in and out of in a day or two . I'm sure at least 8 or so of the 12 mentioned here are ones still in his stable so the newest ones since I stopped receiving the service really must be hauling heavy water. What BS …. tread lightly Gummers.

markS
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markS
July 24, 2011 9:21 am

The publishher must of been feeling guilty and shamed because a few months after receiving EIC they gave me his low cost service, Energy Advantage , gratis for a year. Frankly that service has probaly done considerably better for its time frame and he supplies a whole lot more of his expertise with all the writings for it. hmmmm

markS
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markS
July 24, 2011 9:29 am

Is there a thread anywhere that anyone knows of about Energy Inner Circle and does any other subscribers to EIC share my opinion? At least Money Morning , the publisher keeps their refund guaranties without a fuss.

Barbara
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Barbara
August 12, 2011 4:30 pm

Please explain Frontline's drop from 40 to 30 to 7. Lost s lot of my retirement money and finally sold in the teens , at a great loss, when the dividend dropped. It seems to me that Fredericson builds up companies, makes money and then jumps ship and leaves the rest of us to drown. Am I just imagining this or does anyone else out there have a clearer explanation.

AlterIn
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AlterIn
August 14, 2011 6:11 pm

@ Hey Yu

Sounds like your experiment worked out better than propane did for the cheeleaders in a southern US state. They put a tank (evidently leaking a bit) in the back of a station wagon, and lit cigarettes. Very severe burns.

AlterIn
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AlterIn
August 14, 2011 6:17 pm

@ GumShoe

Any idea why Comment#14 by Hey Yu shows up in the Print-formatted page, but not this one?

AlterIn
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AlterIn
August 14, 2011 7:03 pm

Re: 16Mar2011, "… Japan's Disaster Creates a Tipping Point in LNG Shipping", SeekingAlpha

A reader comment mentioned "11mtpa" as the LNG required to replace power from nuke plants shutdown in Japan. Assuming "mtpa" meant million tonnes per annum", that would be roughly 16.5 billion meters^3 . That would be nearly 16.5% of all the LNG transported in 2009 (re CediGaz). Hardly an epic increase, but could certainly be a short-term price driver.

AlterIn
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AlterIn
October 15, 2011 6:24 pm

HR 1380 hardly seems a high priority in congress, since it has been stuck in committee for nearly six months. See: http://www.govtrack.us/congress/bill.xpd?bill=h112-1380

GARY sTOLTZ
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GARY sTOLTZ
November 22, 2013 10:30 am

tHERE’S BEEN TWO EMPTY LNG tanks on Staten Island, NY that have sat empty for 20 years because storage was deemed too dangerous that close to NYC.

Thomas Lepere
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Thomas Lepere
May 13, 2014 9:29 pm

Mr. Kent Moore is currently teasing regarding information disclosed for making a fortune off of a URANIUM Mining Company (Not Comeco), in his Energy Inner Circle
newsletter @approximately $2K per year. Can anyone subscribing clue us in to the name of the new mining company and the price per share?

Gravity Switch
Admin
11
July 14, 2011 4:30 pm

Ah, thanks for noticing — will try to clean that up and separate them.

Hey Yu
Guest
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Hey Yu
July 26, 2011 11:32 am

Having been peripherally involved in LNG, I observed an experiment where some of my more adventurous associates tried to light some LNG liquid. No one was hurt simply because the stuff wouldn't ignite. We concluded that ignition takes place only when a mix of the gas with the right amount of air (oxygen) is created. In our case, the LNG fumes just extinguished any flame.

Something like smokers fueling their cars with gasoline.

Henry Pope
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Henry Pope
August 2, 2011 10:13 am

Can you elaborate a bit on your technique?

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