Sunday, February 10, 2013

"Things are heating up in the oil patch, so I decided to pick out an oil service stock to help you prosper from the trend"

Dow Jones Industrial Average 13,992.97 (Down) Week Ending 02-08-2013


I apologize for not writing about stocks that trade at prices of $25.00 a share or below, which I know that people would like to read about. I cannot seem to find allot of fairly priced low priced stocks that fit my criteria, although I will continue to search for them.

In regards to the Oil  Patch, to bring you an under $25.00 stock I would have to had brought you Weatherford International (Symbol WFT),  which may be a good Speculation for some upside, but would not pass my financial safety guidelines.  
You would be better served and take on less risk by buying the stock of
HollyFrontier Corporation ( Symbol HFT, $56.26).  This is one of the stocks that the institutions and ETF's will purchase to participate in the oil services sector.

HollyFrontier Corp. has a Return on Equity of 29.40% and PEG ratio of 2.88. I am OK to accept that PEG ratio because the forward PE on the stock is a low 6.5 compared to the rest of the market.                                               
2012 earnings per share were $8.63 per share and the 2013 earnings are projecting out at $6.89 per share. The stock pays a dividend yielding 1.42% annually.

The One year Total Return on the stock has been a marvelous 67.44%. 5 year sales have been running 44.44%  and 5 year earnings growth has been 22.96%.                                    Another name in this space with good financials would be Haliburton (Symbol HAL) which has also had a nice runup in the last three months. 
So, get all your snow shoveled up, start working on your tax returns, (hopefully you have capital gains to declare), catch up on your back episodes of Downton Abbey, then settle in for an afternoon of watching golf at the Pebble Beach Country Club down near Carmel by the Sea, in California.

 See you on the beach,    Freewilly

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