Sunday, November 30, 2014

"Oil stocks and crude oil are crashing down in price, but let's not "throw away the baby with the bathwater". There are still some good energy stocks"

Dow Jones Industrial Average 17,810 (Up)  Week ending 11-21-2014
Dow Jones Industrial Average 17,828 (Up)  Week ending 11-28-2014

 Well, with the OPEC big four countries decision not to cut production, crude continued it's slide on Friday with West Texas Intermediate crude trading down to $66.15 per barrel, down 11.4 % and the Brent Crude fix at $70.15 , down 10.85%.

Just like any other sector in a downturn, every energy company in the group is not affected in the same way. The oil service companies, midstream pipeline companies, and some refiners will probably not be as adversely affected by the drop in crude pricing.

How about Murphy USA, (Symbol MUSA, $63.72), that has most of their gas stations near WalMart stores. The stock is up 38.4% this year.

Energy Transfer Equity, LP. (Symbol ETE, $59.39), which has a PEG Ratio of 0.81 and a 2.8% Dividend. The stock is up 58.86% this year.

Triangle Petroleum Corp. (Symbol TPLM, $4.82) has a PEG Ratio of 0.34 and a forward PE of 9.3. It has a Return on Equity of 17.46 and 2/3 of it's business is in midstream pipeline and oil services. It also has a 18% Operating Margin.

Kinder Morgan Inc. ,(Symbol KMI, $41.35), is probably the best quality of the group. The consolidation of Kinder's properties makes it the largest midstream pipeline provider in the country. It pays a 4.26% dividend and it is up 15.37% this year. Jim Cramer of CNBC and The Street has been pounding the table on this one for a couple years now.

So don't run for the hills when you see an area crashing down. Look for the opportunities that come available for good long term investments that would normally not be available to you to buy at these prices.

 Off to start a great December month,


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