Tag Archives: energy

Has ConocoPhillips Reached An Inflection Point? [Seeking Alpha]

Despite mixed Q1 results, ConocoPhillips (COP) could be approaching a very significant inflection point for its operation while it continues to improve its bottom line.

ConocoPhillips, with a market cap of $71.93B, is the largest independent U.S. oil and natural gas producer. COP operates as an integrated energy company, exploring for, producing, transporting and marketing crude oil, natural gas, natural gas liquids and liquefied natural gas, globally. COP is organized into Exploration and Production, Midstream, Refining and Marketing, LUKOIL Investment, Chemicals, and Emerging Businesses segments.

Mixed Results

For Q1, 2012, COP’s net income fell to $2.14B ($1.73 per share) from $2.94B ($2.27 per share). Excluding discontinued operations, COP earned $1.42 per share. After spinning off Phillips 66 (PSX), COP’s downstream business, in Q2, 2012, COP’s income was negatively impacted by $700M. Excluding PSX’s impact, the earnings were about the same a year ago. Total revenues fell 10% to $14.65B, from $16.08B the previous year. According to FactSet, analysts, on average, expected adjusted net income of $1.42 per share on revenue of $12.79B.

Falling Production

Earlier in January, the management indicated that oil and gas production may reach a low point this year as the company completes a multi-year restructuring and asset sale program. Oil and gas output from continuing operations declined to 1.56 million barrels oil equivalent ((boe)) per day from 1.58 million boe per day a year earlier.

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Valero Energy: All Ethanol Plants Running, Improving Cash Flow [Seeking Alpha]

Valero Energy Corp (VLO) is a refining and marketing company. VLO closed flat at $44.95 on March 27, 2013. VLO had been trading in the range of $20.00-$48.97 in the past 52 weeks. VLO has a market cap of $24.85B with a beta of 1.53. With the recent pullback, investors can review the long-term position for VLO, which has higher margins with a fair priced cash flow.

All Ethanol Plants Running

Valero Energy had resumed production on March 21, 2013 at an ethanol plant in Linden, Indiana, the last of several plants that the company idled in 2012 due to poor margins. The Linden refinery was idled last year. When running, it can process about 43 million bushels of corn into 120 million gallons of denatured ethanol and 370,000 tons of co-products. Valero spokesman Bill Day said, “Improved margins have allowed the plant to be operated profitably, which led to the restart”.

Operations resumed at a Valero facility in Bloomingburg, Ohio, in early March and a plant in Albion, Nebraska, was restarted last month. With the restart of the Linden, Indiana, plant, all 10 of Valero’s U.S. ethanol facilities are online.

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National Oilwell Varco And Enterprise Products: 2 Solid Stocks To Own [Seeking Alpha]

National-Oilwell Varco, Inc. (NOV) and Enterprise Products Partners L.P. (EPD) are two oil & gas related stocks in the sector of basic materials, both with high net margins, solid revenue growth, and offering steady dividends. Both stocks will be analyzed fundamentally and technically in this article. Investing strategies will also be reviewed.

National-Oilwell Varco, Inc.

NOV was up 1.40% and closed at $69.74 on March 26, 2013. NOV had been trading in the range of $59.07-$89.95 in the past 52 weeks. NOV has a market cap of $29.64B with a beta of 1.71. NOV remains a great buy with its strong fundamentals and solid growth at current valuation.

On March 26, 2013, Guggenheim upgraded NOV from neutral to buy with a price target of $83.00 (from $71.00). Analysts currently have a mean target price of $85 for NOV, suggesting 21.88% upside potential. Analysts, on average, are estimating an EPS of $1.37 with revenue of $5.39B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $5.96 with revenue of $22.72B, which is 13.40% higher than 2012.

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Westport Innovations: Improving Earnings And Ready For New Emission Standards [Seeking Alpha]

Westport Innovations Inc. (WPRT), with a market cap of $1.56B, is a provider of engine and fuel system technologies, engaged in the research, development and marketing of low-emission engine and fuel injection systems that utilize alternative gaseous fuels such as natural gas, propane or hydrogen. WPRT was down 0.14% and closed at $28.24 on March 26, 2013. WPRT had been trading in the range of $21.93-$45.85 in the past 52 weeks. WPRT is currently 38.41% below its 52-week high and 28.77% above its 52-week low.

EPA Certificate

As reported by Zacks, Cummins Westport, a joint venture between Cummins Inc. (CMI) and Westport, revealed that its ISX12 G engine had received a certificate from the U.S. Environmental Protection Agency. The engine met both the EPA 2013 regulations and the new greenhouse gas and fuel-efficiency rules that are about to take effect next year. Limited production of the ISX12 G engine will be started next month, and full production of the engine will start in August.

WiNG Power Ready on Ford F-Series

Westport announced that the Ford F-Series Super Duty trucks with the Westport WiNG Power System will soon be available to Canadian customers and be ready for delivery to customers by late June 2013.

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Halliburton And Weatherford: More Upside Fueled By EPS Growth [Seeking Alpha]

Halliburton Company (HAL) and Weatherford International Ltd (WFT) are two oil well services and products providers, both with higher revenue growth and lower Forward P/E as compared to their peers. Both companies had received analysts’ upgrades recently and will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.

Halliburton Company

HAL was up 0.08% and closed at $39.47 on March 21, 2013. HAL had been trading in the range of $26.28-$43.96 in the past 52 weeks. HAL has a market cap of $36.78B with a beta of 1.61. After years of integrating its drilling services, HAL has an edge with more optimized services with lower cost. By standardizing on Halliburton’s services, which placed its drilling engineering applications under one roof, customers could obtain substantially greater well performance and reduce the levels of nonproductive time.

On March 21, 2013, Guggenheim upgraded HAL from neutral to buy with a price target of $48.00 (from $42.00). Analysts currently have a mean target price of $48.63 and a median target price of $48.00 for HAL, suggesting 21.61%-23.21% upside potential. Analysts, on average, are estimating an EPS of $0.58 with revenue of $6.89B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $3.00 with revenue of $29.69B, which is 4.20% higher than 2012.

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Caterpillar And Cummins: Waiting To Buy For Long-Term Growth [Seeking Alpha]

Caterpillar Inc. (CAT) and Cummins Inc. (CMI) are two industrial stocks, with a higher net margin, stronger ROE, and lower Forward P/E as compared with their peers. Both stocks had received positive calls from analysts and will be reviewed fundamentally and technically in this article. Investing strategies will also be presented.

Caterpillar Inc.

CAT was down 1.51% and closed at $86.94 on March 20, 2013. CAT had been trading in the range of $78.25-$112.00 in the past 52 weeks. CAT has a market cap of $56.95B with a beta of 1.92.

On March 20, 2013, Standpoint Research initiated coverage on CAT with a buy and $105 price target, saying the stock is oversold. Analyst Ronnie Moas said,

I see CAT earning $10.00 / share if we look out to 2014-2015 and I expect to see a $105 price quote here (by 2014-2015). Caterpillar shares are now $27 (24%) off their ($114) high and trading at < 9X my EPS estimate looking out two years. The concerns regarding China and inventory levels are already reflected in the share price.

Analysts currently have a mean target price of $111 and a median target price of $113.00 for CAT, suggesting 27.67%-29.97% upside potential. Analysts, on average, are estimating an EPS of $1.46 with revenue of $13.90B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $8.03 with revenue of $63.69B, which is 3.30% less than 2012. However, analysts are predicting revenue of $69.02B for 2014, which is 8.40% higher than 2013.

On March 20, CAT said that global sales of its heavy equipment fell 13 percent for the three-month rolling period that ended in February, hurt by a steep drop in Asia Pacific demand. Asia Pacific sales dropped 26 percent in the recent period while North American sales fell 12 percent. The only region to post an increase was Latin America, where sales rose 3 percent. CAT’s 2013 profit could shrink if the global economy doesn’t pick up in the second half of the year as mining companies and builders remained cautious about buying new equipment.

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Anadarko And Phillips 66: Fundamental Improvement Continues [Seeking Alpha]

Anadarko Petroleum Corporation (APC) and Phillips 66 (PSX) are two energy stocks, with higher margins and stronger ROEs compared with their peers, gaining with fundamental improvements. Both stocks will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.

Anadarko Petroleum Corporation

APC was up 3.75% and closed at $86.40 on March 20, 2013. APC had been trading in the range of $56.42-$87.50 in the past 52 weeks. APC has a market cap of $43.25B with a beta of 1.53.

On March 20, 2013, UBS reiterated an overweight rating and increased its target price from $102 to $105 for APC. On March 18, 2013, Barclays also reiterated an outperform rating and increased the target price from $101 to $102 for APC. Analysts currently have a mean target price of $104.13 and a median target price of $100.00 for APC, suggesting 15.74%-20.52% upside potential. Analysts, on average, are estimating an EPS of $0.89 with revenue of $3.47B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $4.02 with revenue of $15.05B, which is 12.20% higher than 2012.

On March 21, 2013, APC announced a U.S. Gulf of Mexico oil discovery that may produce more than half a billion barrels of crude. As reported by Bloomberg, the well, drilled to almost 6 miles (9.6 kilometers) beneath the seafloor in water 5,800 feet deep, encountered oil deposits more than 1,000 feet thick. John Malone, an analyst for Global Hunter Securities LLC believes the field may produce 700 million barrels of oil, more than twice a previous estimate. The discovery adds $3 a share to Anadarko’s value as indicated by Brian Lively, an analyst for Tudor, Pickering, Holt & Co.

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Petrobras And Total: Low Valuation Energy Stocks Deserving Upgrades [Seeking Alpha]

Petroleo Brasileiro Petrobras SA (PBR) and Total SA (TOT) are two large cap, oil and gas integrated companies offering steady income and currently trading at low Forward P/E. Both stocks had received positive upgrades from analysts recently and will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.

Petroleo Brasileiro Petrobras SA

PBR is a Brazil-based integrated oil and gas company, controlled by the Brazilian government. PBR was up 2.36% and closed at $17.81 on March 15, 2013. PBR had been trading in the range of $14.40-$28.70 in the past 52 weeks. PBR has a market cap of $116.16B with a beta of 1.48.

On March 7, 2013, Credit Suisse upgraded PBR from neutral to outperform with a price target of $25.00. Analysts stressed they have been cautious for years but added that the recent move to raise diesel prices may be the beginning of a change in attitude, and the company might be at a “inflection point”. PBR had gained 22.91% since the closing of March 5, 2013.

Analysts currently have a mean target price of $25.71 and a median target price of $24.10 for PBR. Analysts are estimating an EPS of $0.63 with revenue of $36.11B for the current quarter ending in March 13, 2013. For 2013, analysts are projecting an EPS of $2.22 with revenue of $154.28B, which is 7.10% higher than 2012.

On March 15, 2013, PBR stated it will keep its 5 year capital spending plan at $236.7B according to the original plan. Petrobras’ previous 2012-2016 plan called for investments of $236.5B. PBR will continue to speed up and streamline development of giant offshore oil resources.

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4 Solar Stocks With Positive Upgrades But Concerns Remain [Seeking Alpha]

In this article, four solar stocks with recent upgrades will be presented, including First Solar, Inc. (FSLR), Suntech Power Holdings Co. (SPWR), Suntech Power Holdings Co. (STP), and Trina Solar Limited (TSL). Fundamental comparison will also be provided for these four stocks.

First Solar, Inc.

First Solar, Inc. manufactures and sells solar modules with an advanced, proprietary thin-film semiconductor technology, and it designs, constructs, and sells photovoltaic (PV) solar power systems. FSLR was up 3.19% and closed at $25.90 on March 6, 2013. FSLR had been trading in the range of $11.43-$36.98 in the past 52 weeks. FSLR has a market cap of $2.26B with a beta of 1.57.

SunPower Corporation

SunPower Corporation is a vertically integrated solar products and services company that designs, manufactures and delivers high-performance solar electric systems worldwide. SPWR was up 1.83% and closed at $12.23 on March 6, 2013. SPWR had been trading in the range of $3.71-$13.88 in the past 52 weeks. SPWR has a market cap of $1.97B.

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National Oilwell Varco: Buy For Increasing Revenue With Strong Earnings [Seeking Alpha]

National-Oilwell Varco, Inc. (NOV) is one of the largest providers of equipment and components used in oil and gas drilling and production operations, oilfield services, and supply chain integration services to the upstream oil and gas industry. Since our last publication of “National Oilwell Varco, An Even Better Buy By Buying Robbins & Myers” on December 28, 2013, NOV had reached its recent high of $75 on January 25, 2013. Since then, NOV had dropped down and closed at $68.10 as of February 7, 2013, which was still 1.69% above our last reviewed price of $66.97. In this article, recent developments will be updated for NOV and the current options play will be reviewed.

Recent Developments

Q4, 2012 Earnings: On February 1, 2013, NOV reported net income of $668M, or $1.56 a share, from $574M or $1.35, a year earlier. Excluding one-time items, NOV earned $1.49 per share, beating analysts’ estimates of $1.44 as compiled by Bloomberg. The revenue was up 33.5% to $5.69B, beating estimate of $5.3B. However, gross margin narrowed to 24.8% from 30.2%. As reported by Fox Business, “Revenue in the rig technology segment jumped 25%, while the petroleum services and supplies unit saw revenue grow 13%. Revenue from the distribution and transmission segment more than doubled, mostly due to recent mergers.” Backlog at the rig-technology business reached $11.86B as of December 31, 2012, up from $11.66B in the previous quarter.

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