Can you profit from the greatest buying opportunity in energy stocks in 30 years by purchasing Exxon Mobil (XOM, Weiss Ratings: C) or Chevron (CVX, Weiss Ratings: C)? Sure. Those stocks roughly doubled after the 1986 energy crash that closely resembles what we experienced in 2014.
But could you make much more? By thinking independently, and looking in some out-of-the-way places? That’s exactly what my work suggests, and it’s why I’m so excited about the opportunities out there!
Take foreign energy companies that trade here as American Depositary Receipts (ADRs). I’ve been digging into a whole host of them, including companies based in Norway, South Africa, Brazil, Australia, Russia and elsewhere.
These names got hammered by the double whammy of falling energy prices and a rising U.S. dollar. Many traded to their lowest levels and cheapest valuations since the depths of the Great Recession.
|Some junior U.S. energy producers and transporters are trading at dirt-cheap levels.|
But now? They’re on the move higher because energy prices AND the currency market are now moving their way! That means instead of a double whammy, you get a double tailwind! I’m particularly interested in plays in Canada and Australia, seeing as the Canadian and Aussie dollars are at four-month highs and looking strong.
Or how about some of the junior U.S. energy producers and transporters? I’m talking about names that plummeted 60 percent, 70 percent or more during the collapse. They’re trading at dirt-cheap levels … at the same time their larger competitors are starting to write big checks to buy ’em up!
Noble Energy (NBL, Weiss Ratings: C+) shelled out $2.1 billion to buy junior producer Rosetta Resources (ROSE, Weiss Ratings: D+) on Monday. Then 48 hours later, natural gas giant Williams Cos. (WMB, Weiss Ratings: B) agreed to snap up the pipeline company Williams Partners LP (WPZ, Weiss Ratings: Unrated) for a whopping $13.8 billion.
Those moves followed closely on the heels of a handful of other mega-transactions: Royal Dutch Shell (RDS.A, Weiss Ratings: C) laid out 70 billion big ones to buy BG Group last month, while Repsol of Spain (REPYY, Weiss Ratings: C+) snapped up Canada’s Talisman Energy for $8.3 billion back in December.
Major investment banks are now cooking up “hit lists” of likely takeover targets — and I’m hard at work doing the same here at Weiss Research. These are the kinds of companies that could do much more than double off their energy crash lows. Heck, some of them are already on the march much higher!
Then there are all kinds of peripheral investments. The U.S. is undergoing a planning and construction boom designed to open up the world to exports of our abundant natural gas. More and more of those storage and liquefaction facilities will come online in the next couple of years, boosting sales and profit for companies in that industry.
Or how about all the pipeline companies that are helping get gas and oil from wellhead to refining and shipping facilities? Or beaten-down banks in foreign countries reliant on energy production and export? With those economies and currencies now improving and appreciating, they offer tremendous value and juicy dividend yields.
There is a virtually endless list of opportunities out there, and these companies should prosper over time even if we see temporary pullbacks and corrections in the price of crude or nat gas.
In the meantime, keep a close eye on the $62-$63 area for crude oil and the $3 level for natural gas. We tested the former a few days ago, and we hit the latter yesterday. If we can break through those levels convincingly, it would signal to me that the next major leg up in energy is underway!
Until next time,
P.S. My mission is to make sure YOU are prepared to protect your wealth and keep it growing even in the worst of times. And for a limited time, if you accept this risk-free offer to my Safe Money Report, you’ll save a whopping 75 percent! Plus … get immediate access to 4 special bonuses absolutely FREE!