Author: Adam Feik

Is It Time to Take Profits on Oil Refining Stocks? (re-visited)

Posted on by Adam Feik

Adam Feik - INO.com Contributor - Energies


I wrote on February 24th about whether the time had come to take profits on oil refining stocks like Tesoro, Valero, and others. (My conclusion was to hold the stocks for the time being, but to keep a close eye on them).

Since then, oil refiners have continued rising (generally), as oil prices have showed continuing weakness – especially in the last 30 days. Crude oil, of course, is the key input for refiners, so refiners benefit when its raw materials prices are low. Nymex crude fell below $50/bbl Wednesday, having fallen from $61 on June 23, 2015, and from $107 on June 20, 2014 (data from eia.gov).

Here's an updated table showing performance of selected refiners through July 22:

On Thursday, July 23rd, oil and refining stocks both fell. But more often recently, it's been… Continue reading "Is It Time to Take Profits on Oil Refining Stocks? (re-visited)" →

Would You Invest In Saudi Arabia? How About Iran?

Posted on by Adam Feik

Adam Feik - INO.com Contributor - Energies


Saudi Arabia opened its $590 billion stock market to foreign investors Monday – a move aimed at helping the country’s companies endure a potentially extended period of lower oil prices.

Interestingly, only about one-fifth of the companies traded on the Tadawul Saudi Stock Exchange are directly in the oil business. But most others are, of course, heavily affected by oil, which has long been the major driver of Saudi Arabia’s economy.

By opening the exchange to all foreign investors, the Saudis hope to help its domestic companies raise significant capital, thereby helping to strengthen – and diversify – the country’s economy. The Kingdom may also be hoping some new foreign investment can help plug a hole in its budget, which has expanded to pay Saudi companies that rely on government contracts for construction, infrastructure, agriculture, education, and other areas. According to the Saudi Gazette on Sunday, the country’s breakeven crude oil price has risen from just under $75 in 2009 to about $90 today, translating into an estimated $38.6 billion budget deficit for fiscal year 2015. Continue reading "Would You Invest In Saudi Arabia? How About Iran?" →

The Case Of The Vanishing Money And Attempted Murder Of U.S. Coal

Posted on by Adam Feik

Adam Feik - INO.com Contributor - Energies


Don’t look now! It’s a frightening scenario for investors with a stake in US coal.

Even as we speak, money is disintegrating. No one seems safe. It’s like a mass murderer is on the loose. Investors in both stocks and bonds of US coal companies are suffering profusely. Someone please! Stop the bleeding!

On Tuesday, Bloomberg reported this horrifying reality: “Two months after Peabody Energy Corp. raised $1 billion from the junk-bond market, buyers have lost 18 percent in market value as a slump in coal prices worsened.”

Bonds! People who bought Peabody’s 10% bonds have lost 18%! Continue reading "The Case Of The Vanishing Money And Attempted Murder Of U.S. Coal" →

What's a "YieldCo"? (Hint: It's Green)

Posted on by Adam Feik

Adam Feik - INO.com Contributor - Energies


Quick: Name as many energy stocks as you can that fit these criteria:

  • Better than 12% annualized total returns over the past 5 years
  • Positive returns over the last 12 months
  • Greater than 3% dividend yield
  • Currently trading 5% or more below its own 52-week high

There aren't very many. A handful of NYSE-listed pipeline companies make the cut, including these: Continue reading "What's a "YieldCo"? (Hint: It's Green)" →

How To Invest In Oil Like A Pro

Posted on by Adam Feik

Adam Feik - INO.com Contributor - Energies


In the last 2 weeks, I've written about oil ETFs and broader energy and commodity ETFs. Interestingly enough, some of those ETFs have switched over to "green triangles" on their MarketClub charts, just within the past few days. Check out USO and DBE for example. DBO (the oil ETF I prefer over USO) has not yet flipped over to a long-term ("monthly") green triangle.

Another way to play oil prices

Today, I'm going to describe a slightly more sophisticated way to bet on rising oil prices. The advantages of this approach, compared to buying ETFs, are these:

• You can place fewer dollars at risk. Yet at the same time…
• You can retain reasonable upside potential, and…
• In combination, you can almost entirely protect your principal, in order to make sure you'll live to invest another day (even if you're wrong about this particular oil bet).

Here's how it works: Continue reading "How To Invest In Oil Like A Pro" →