Is It Time To Invest In Energy?

I'm not ready to call a bottom in oil prices yet,said Richard Tallis,an energy analyst at Capital One,but it is a good time to focus on oil stocks.Currently I'd go with individual names rather than an etf.You want names with a strong balance sheet.Concho Resources works in the Permian basin.They have a long track record and a very strong balance sheet.They will add acreage over the next few years.*
The general consensus on the price of oil is,it may go down even to the upper 30s,but will rebound to the 60s 0r 70s in the second half of the year.*
Now is a good time to get in,says Chad Brownstein of Rocky Mountain Resource Holdings.It's time to hit the oil services sector.For the retail player,find oil services companies that are trading at one to two times cash flow,and with late-term debt at not more than two times leverage;prudent balance sheets;and long-term contracts.
The equity trades for mid-size companies are down 70%.They're at bottom,bargain basement prices.Start with your toe in the water here.Mid-40s is the bottom of oil prices.OPEC played their card in early November.They hurt the American companies,but they're not going to hurt themselves.I can see that in mid-summer the cards will be in place,Mr.Brownstein observed.*
Concho Resources(CXO),Market Vectors Oil Services Fund ETF(OIH)

Business Tips and Trends For January 2015

Everyone has centered their portfolio on the emerging market middle class,overlooking that they make 8,000 a year,not 50,000 a year like the American middle class,and buy different things than Americans do,points out value investor Bill Smead,CEO and CIO of Smead Capital Management in Seattle.As things slow in the economy,the consumer staples companies won't have the customers that they thought they would in the emerging markets.Earnings are going to be difficult.What will accelerate,will be domestic revenue streams,and the S&P 500 is not well set-up for that.
The balance sheet of the average 28 year-old is the best it's ever been,because the majority of 28 year-olds were married in previous decades.Since people wait so late to get married,they don't worry about student loan debt until they get a wife and a child-someone to worry about other than themselves.Warren Buffet has staked his company Berkshire Hathaway on them,with second tier companies that cater to them in its portfolio.
These millenials are doing things later,but they're going to do them.These echo-boomers are going to be the most exciting emerging market you ever saw.They're just getting married and having their first child,and when they do,they're going to want that stand-alone home.Everybody's scrambling around trying to find companies that make money off of them.*
The Ireland-based retailer Primark is coming to America in 2015.They sell bargain fashion,such as jeans for 7.00 a pair.They may well change the retail landscape.Primark Stores,Ltd. is a subsidiary of Associated British Foods.It has stores throughout Western Europe,where it sells its own brands of children's,men's and women's wear;homeware,acessories and foot wear;as well as beauty products and confectionary.Walmart,watch out.*
Right now,a lot of the offshore oil players are feeling the pain at a search cost of 50.00 a barrel,while the onshore oil shale search is only 20.00 a barrel,says Chad Brownstein of Rocky Mountain Resource Holdings.What you're going to see in the market in 2015 is,a lot of activism turning their guns on the oil companies.Hedge funds will come after small and mid-cap firms to consolidate and sell them.*
Everyone is saying stocks are overvalued,but they're not-when you look at a 2.2% yield on a ten year Treasury note,I think stocks are still a good value,said CNBC stock market reporter Bob Pisani.You've got dividends and earnings going up.*
Some large-cap stocks to consider:Gannett(CGI),eBay(EBAY),Amgen(AMG),Bank of America(BAC),Merck(MRK).They were the top five holdings of the Smead Value Fund(SMVLX) as of September 30,2014.

The Problem With Falling Oil Prices

Plummeting oil prices are affecting those who deal in bundles of loans to energy companies.Collateralised Loan Obligation managers are being forced to sell.We're seeing a lot of pressure on these businesses that have automatic sell programs.I believe we're at a technical level here that's being forced to be sold by the global markets,said Chad Brownstein,CEO of Rocky Mountain Resource Holding Inc.I clearly believe that a stable number for the energy industry is about 70.00 a barrel.*
The problem they're going to have is,the large offshore oil drillers are going to feel it.The real victims are the large drillers at a cost of 50.00 a barrel to produce.Oil services are going to get hurt,the technical levels and the prices of the debt that are attached to the major oil companies.Currencies of oil dependent countries such as Canada,Mexico and Norway are getting crushed,Mr.Brownstein pointed out.*
Sustained low prices could halt some drilling projects,postpone others,squeeze certain fracking operations and even lead to the loss of certain jobs within the energy sector,wrote contributor Kevin Mahn in the December 3 issue of Forbes magazine.The net long-term effect could actually become somewhat of a drag on US GDP if oil prices drop further and/or remain at those lower prices for an extended period of time.*
If credit dries up for energy companies,restaurant chains may suffer in oil-dependent states like Texas and California.Every major restaurant chain has high exposure in these states.*
Rocky Mountain Resource Holdings is a limited liability company that acquires and develops natural resource assets such as oil and gas reserves,agribusiness,energy infrastructure,and industrial minerals and chemicals.With offices in Los Angeles and Denver,it seeks to leverage its deep relationships in the industry to facilitate off-market acquisitions of private assets,including family-owned assets,in the midst of both asset and generational transitions,the company says.*
In Monday trading,WTI crude closed at 55.91 a barrel,down 2.14,or 3.70%;while Brent crude closed at 61.06 a barrel,down 1.83,or 2.96%.