Energy

5 Themes in Solar Stock Trading You Shouldn't Ignore

twocents@thestreet.com (Eric Rosenbaum) — Fri, 10 Feb 2012 12:00 GMT

NEW YORK (TheStreet) -- The seemingly unstoppable rally in solar stocks -- which hit a fever pitch on Thursday, ironically the same day that the U.S. government gave approval for $8 billion in loans for two nuclear power plants -- may not be over.

However, there are a few key solar sector trading rules to keep in mind given the run-up in stocks this year. Here are five ways to think about whether the latest short-term burst in the sector will continue to be a trading opportunity for long-only investors or for shorts to step in and profit from the madness. 1. There are only two sentiments in solar, and there is only enough room in town for one of them at a time: It can only be excessive optimism or excessive pessimism.

It's no surprise, then, that given solar stocks were trading as if the industry had died -- it wasn't even possible at the beginning of the year to borrow some Chinese solar stocks that investors wanted to keep shorting -- sentiment turned early in 2012. Tack on top of that the risk-on equities environment with the S&P 500 already up more than 7% this year, and many of the worst-performing stocks in 2011 have been in rally mode, including solar. 2. Optimism about solar demand doesn't equal better margins and profits for publicly traded companies. ...

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First Solar Key Project Can't Cash DOE Check

twocents@thestreet.com (Eric Rosenbaum) — Thu, 09 Feb 2012 22:33 GMT

NEW YORK (TheStreet) -- First Solar is heavily reliant on its large-scale solar projects for earnings, so a new delay in funding from the Department of Energy is worrisome for the company.

On Thursday afternoon, First Solar filed a statement with the Securities and Exchange Commission indicating that initial funding of the DOE loan for its Antelope Valley Solar Ranch One project has not yet occurred, pending resolution of an outstanding construction permit issue.

The 230 megawatt project is scheduled to receive $646 million in a DOE loan package. ...

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Anadarko Banks on Liquids Production Growth

twocents@thestreet.com (Trefis) — Thu, 09 Feb 2012 18:32 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Trefis) -- Independent explorer Anadarko has posted growing revenues on strong growth in liquids production that benefited from high oil prices.

The company posted a full year loss for 2011 because of $3.9 billion in losses related to the settlement it reached with BP related to the Deepwater Horizon disaster. Operational results were encouraging, as the company increased liquids production from onshore resources in North America. ...

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3 Energy Stocks Hitting 52-Week Highs: MarkWest, Western Gas, Plains Exploration

twocents@thestreet.com (Alexandra Zendrian) — Wed, 08 Feb 2012 21:16 GMT

NEW YORK (TheStreet) -- Shares of these three energy companies reached 52-week highs on Wednesday: MarkWest Energy Partners, Western Gas Partners and Plains Exploration & Production.

MarkWest Energy Partners

The natural gas company raised its fourth-quarter dividend 11 cents to 76 cents a share last month. ...

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Trading Coal Stocks: Between Bankruptcy Risk and a Bottom

twocents@thestreet.com (Eric Rosenbaum) — Wed, 08 Feb 2012 19:37 GMT

NEW YORK (TheStreet) -- The situation continues to look pretty bad for coal stocks, as it has since last year.

Low natural gas pricing and weak demand in a warm winter has kept a lid on coal. The steel market growth profile in 2012 and need for metallurgical coal is OK at best. These companies are in a difficult balance sheet situation, but they've been here and done this cash crunch dance before. Smart investors often say to buy when there is fear in the market, and coal stocks have come back a little from October lows.

Is the next move closer to bankruptcy or an extended bounce? It can't get much worse for coal stocks, or can it? ...

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5 Reasons Big Energy Companies Won't Do Deals in 2012

twocents@thestreet.com (Eric Rosenbaum) — Wed, 08 Feb 2012 11:00 GMT

(Oil service M&A story updated to correct for GE purchase of Wood Group well support division)

NEW YORK (TheStreet) -- Energy stocks are always fodder for the mergers and acquisitions rumor mill, and it's no different in 2012 as the sector isn't lacking for trends to spur M&A.

The North American market is a good place to focus, with oil service companies dealing with a slower pace of growth and increased supply from competitors. ...

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Glencore Mines Shareholder Anger Over Stock Deals (Update 1)

twocents@thestreet.com (Antoine Gara) — Tue, 07 Feb 2012 19:03 GMT

Updated with management comments and added sector detail.

NEW YORK (TheStreet) - Glencore stock deal to buy Xstrata is unique, but not for its $41 billion size.

The mega-merger represent's a rare all-stock deal at a time when companies are sitting on record cash piles and have open access to low interest rates to finance bids. ...

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4 Half-Full or Half-Empty Battles BP Is Still Fighting (Update 1)

twocents@thestreet.com (Eric Rosenbaum) — Tue, 07 Feb 2012 18:38 GMT

Updated from 11:24 a.m. ET to include additional commentary. NEW YORK (TheStreet) --BP is doing many things right in trying to put the Macondo oil spill behind it, but some of the decisions made by the company continue to send mixed signals to investors.

Tuesday's fourth-quarter earnings report offered up four examples of how for each step forward taken by BP, there seems to be room for the market to interpret it as a step backward.

BP Increases Dividend, but Not Enough? BP is increasing its quarterly dividend to 8 cents from 7 cents, a 14% increase. A dividend increase was one of the catalysts that investors were looking for ahead of the earnings report. BP came through, but was the dividend increase short of investor expectations? ...

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Energy Winners: 4 Things Anadarko Did Right

twocents@thestreet.com (Eric Rosenbaum) — Tue, 07 Feb 2012 17:19 GMT

NEW YORK (TheStreet) -- Anadarko Petroleum did a few things right in its earnings report Tuesday and the stock hit a new 52-week high.

The exploration and production company provided four reasons for investors with a longer-term investing horizon to be bullish on the company.

A Clean Beat Anadarko provided a clean beat of Wall Street expectations (excluding one-time charges), reporting earnings of 85 cents in the fourth quarter versus a consensus estimate of 61 cents. Production came in at the high-end of Anadarko's guidance and costs associated with production were 5% lower. ...

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ConocoPhillllps Cuts Production to Lift Gas Prices

twocents@thestreet.com (Trefis) — Mon, 06 Feb 2012 20:15 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Trefis) -- Low gas prices in the U.S. have forced ConocoPhillips and others like Chesapeake Energy to announce production cuts over the past few weeks.

Lower supplies resulted in gas prices rising 17 cents to $2.55 per thousand cubic feet (tcf) after an EIA report indicated that gas inventory levels had declined more than expected in the last week. Gas prices had touched 10-year lows at $2.35 /tcf earlier, which was less than half the price level seen in 2010 as a mild winter exacerbated the oversupply situation in the U.S. ...

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Don't Look Now, BP Best Performing Big Oil Stock

twocents@thestreet.com (Eric Rosenbaum) — Mon, 06 Feb 2012 19:46 GMT

NEW YORK (TheStreet) - Big Oil stocks have been stuck in place to start 2012, with big earnings getting a big yawn from investors. BP, though, is up 9% so far this year headed into its fourth quarter report on Tuesday, and the company isn't out of stock catalysts either.

Sometimes it's good to be the sector laggard, since the Macondo oil spill overhang has given BP room to rise unrelated to the larger narrative of global oil majors facing an uphill battle in growing production. ...

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Nabors CEO Move Isn't Too Little, but It's Really Late

twocents@thestreet.com (Eric Rosenbaum) — Mon, 06 Feb 2012 19:13 GMT

NEW YORK (TheStreet) -- Before giving Nabors Industries Chairman Eugene Isenberg credit for giving up his right to a $100 million payment that was due to him for doing nothing more than retiring, keep in mind that this is a CEO who made $109 million in the past three years alone, during a period of time when his company woefully underperformed peers.

High oil prices have done nothing to help Nabors' market performance as Isenberg has helped himself to the company coffers. Nabors Industries Chairman Gene Isenberg gives up $100 million, but he's already done quite well for himself at the expense of shareholders.

Also bear in mind that Nabors is undergoing a Securities and Exchange Commission investigation into excessive corporate perks at the expense of shareholders, as well as lawsuits brought by shareholders against the company and its board alleging similar abuse of shareholder money. ...

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10 Stocks JPMorgan Says May Rise Up to 58%

twocents@thestreet.com (Frank Byrt) — Fri, 03 Feb 2012 20:32 GMT

(Adds that Hess shares erased a loss for the year.)

BOSTON (TheStreet) -- Now is a good time to pick up undervalued cyclical stocks as they are poised for double-digit gains this year, according to JPMorgan Chase investment analysts.

The stock market has rallied 20% in the past four months and, historically, after a run like that, it takes a breather and remains in a trading range, as it has over the past five days, said the Feb. 2 research note from the investment bank. ...

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Exxon's Shale Exploration Project Dashed

twocents@thestreet.com (Trefis) — Fri, 03 Feb 2012 18:49 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Trefis) -- Exxon Mobil has announced that the gas flow from its two exploratory wells drilled in Poland did not justify bringing them into production.

Analysts have speculated that the technical challenges associated with shale exploration in the country made it commercially non-viable to explore the resources. The results could be a major setback for Exxon's plans to expand shale exploration in Europe as Poland has some the best shale prospects in the region and the government has been eager to exploit the resources to reduce dependence on Russian gas. Competitor Chevron is also drilling exploratory wells in the country. ...

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Americans on the Road to Recovery - but Not Driving

twocents@thestreet.com (Andrea Tse) — Fri, 03 Feb 2012 18:01 GMT

NEW YORK (TheStreet) -- Gasoline demand destruction appears to be in force despite signs that the economy appears to be on the road to recovery.

The latest government jobs data revealed far better-than-expected jobs additions in the U.S. economy in January.

But while the latest jobs data show that the economy added 243,000 jobs in January and that the jobless rate fell to 8.3% -- the lowest level since February 2009 -- consumer confidence, income and spending remain lackluster, points out the Conference Board. "We remain cautious," says Kathy Bostjancic, director of macroeconomic analysis with the Conference Board. "While hiring may be picking up, the paychecks that go with it are not." Indeed, with elevated gasoline prices showing no signs of reprieve, the Conference Board earlier this week reported that consumer confidence levels dropped to 61.1 in January after increasing in December. ...

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7 Things SandRidge Energy Doesn't Want You to Know

twocents@thestreet.com (Eric Rosenbaum) — Thu, 02 Feb 2012 18:31 GMT

NEW YORK (TheStreet) -- SandRidge Energy just loves to surprise investors.

In fact, you could say the independent, highly levered exploration and production company is always one step ahead. Or, you could counter with the argument that it always seems to be two steps backward for every step forward with this company.

Case in point: The announcement on Thursday from SandRidge Energy that it was dipping its exploration and production toes into the water, literally, spending just under $1.3 billion to acquire mature, shallow water production assets in the Gulf of Mexico. ...

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The No. 1 Reason Natural Gas Prices Can't Rise: Exxon Mobil

twocents@thestreet.com (Eric Rosenbaum) — Thu, 02 Feb 2012 11:00 GMT

NEW YORK (TheStreet) -- Remember a few weeks ago when Chesapeake Energy, exhibiting the kind of (self-proclaimed) "discipline" it said would be required to rescue natural gas pricing, shut in some of its production?

Natural gas stocks and the price of natural gas rallied on the expectation that other exploration and production (E&P) companies would follow Chesapeake Energy's lead.

This week, natural gas prices have fallen by double digits (roughly 13%), as more data on the overabundance of natural gas and the warm winter weather crimping demand continue to win out over Chesapeake's discipline. A 10-year low in natural gas pricing doesn't have Exxon Mobil panicking. ...

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Alternative ETFs to Watch in 2012

twocents@thestreet.com (Gregg Greenberg) — Thu, 02 Feb 2012 10:30 GMT

Adam Patti, CEO of IndexIQ, says alternative ETFs will be in demand in 2012 as investors seek lower volatility and higher yields.

Exxon Still Biggest Big Oil Stock, but No Longer the Best

twocents@thestreet.com (Eric Rosenbaum) — Wed, 01 Feb 2012 18:11 GMT

NEW YORK (TheStreet) -- Exxon Mobil has long been the No. 1 destination for investors seeking exposure to the energy sector. It shouldn't be any longer.

In fact, Exxon didn't just cede the crown of the market cap king to Apple this month. Exxon has now ceded the right to be a buy-rated big oil stock after a troubling earnings report, according to Argus Research analyst Phil Weiss. The biggest is no longer the best among Big Oil stocks.

Exxon's production of U.S. natural gas continues to edge higher amid the worst natural gas pricing environment in recent history, while its dividend rate continues to trail Big Oil peers, two big issues for the biggest of the Big Oil stocks. ...

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Big Alternative Energy Short of 2012 Takes One Day to Work

twocents@thestreet.com (Eric Rosenbaum) — Tue, 31 Jan 2012 20:52 GMT

Updated from 3:16 p.m. ET to include company statement, analysis from Morningstar. NEW YORK (TheStreet) - Well, that was fast.

The analyst who was synonymous with the big, and very profitable, solar stock short of 2011 made a new alternative energy short call on Monday, and it's already working.

Yesterday Gordon Johnson of Axiom Capital launched coverage of shares of battery maker Polypore -- a play on the electric car market - with a sell rating and a $26 price target, representing 54% downside from its opening price on Jan. 30. ...

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10 Dividend Rich, Deal Ready Utility Stocks Ready for a 2012 Jolt

twocents@thestreet.com (Antoine Gara) — Tue, 31 Jan 2012 17:53 GMT

NEW YORK (TheStreet) -- U.S. utility stocks were a safe way to escape a worsening economy last year with many utility sector funds -- like the Vanguard Utilities ETF and the Utilities SPDR -- significantly outperformed the major indices in 2011.

The sector was boosted by its stable revenues and high dividends, which attracted safety-minded investors as the yield on U.S. Treasury bonds plunged. In 2011, mega-mergers also led a continued utilities recovery from a 2009 lows as companies looked at consolidation as a way to wrench out cost synergies and lower pressure on operating margins.

While $10 billion deals may not be as common in 2012, Fitch Ratings expects continued utilities M&A and gives 10 companies to watch for as possible acquisition targets. ...

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The Problem in Exxon's Q4 Profits

twocents@thestreet.com (Daniel Dicker) — Tue, 31 Jan 2012 16:31 GMT

NEW YORK (TheStreet) -- The Exxon-Mobil report is certainly one of the highlighted reports of any earning season. As the newly second-largest American company (just recently overtaken for first by Apple ), Exxon earnings have been seen as a bellwether for American economic strength.

Too bad, then, that Exxon's results were mostly boring and in some cases worrisome. Sure, the $122-billion-dollar quarter (that's "billion" with a "B") will take all the headlines for the business networks and news agencies for the day, a massive figure that staggers the mind.

But for Exxon, the story for this quarter is very much the same story as the last several -- and similar to a fourth quarter report already made by Chevron and soon to be followed almost surely by Conoco-Philips and the other "lesser" integrateds: There are across-the-board decreases in production and volumes, except specifically in domestic natural gas, the worst sector to be in right now. ...

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2 Big Questions Raised by Another Blah Exxon Earnings

twocents@thestreet.com (Eric Rosenbaum) — Tue, 31 Jan 2012 16:26 GMT

NEW YORK (TheStreet) -- Big Oil companies like Exxon Mobil keep churning out the big profit numbers buoyed by high crude oil prices, but investor malaise about the global oil majors is growing too.

Exxon Mobil reported another big profit quarter Tuesday, but big equals "blah" these days for Exxon and its peers when it comes to the market reaction.

Meeting expectations because oil prices are high -- as Exxon Mobil did with earnings of $1.97 a share and with a usual profit number, $9.4 billion, that rivaled the GDP of small island nations -- is now a given as opposed to a nice surprise. Last year's additional catalyst of booming refining businesses is now a distant memory, putting the focus back on what Big Oil companies are doing to grow production. Exxon Mobil continues to pump out big profits, but market love for Big Oil's earnings are running on empty. ...

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Oil Prices Spike on EU Budget Pact

twocents@thestreet.com (Andrea Tse) — Tue, 31 Jan 2012 14:23 GMT

NEW YORK (TheStreet) -- Oil prices popped back up above $100 a barrel Tuesday on supply concerns and a rise in global sentiment thanks to feelings of real progress in the European Union.

West Texas Intermediate (WTI) light sweet crude oil for March delivery was spiking $1.15 to $99.93 a barrel after touching $100.69 earlier, as global equities rose on news that European Union leaders have agreed on a new fiscal union pact and signed off on details of a permanent bailout fund for the euro zone.

March Brent futures were rising $1.31 to $112.06 a barrel. ...

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Exxon Mobil Tops EPS Estimates on Revenue of $122B

twocents@thestreet.com (Joseph Woelfel) — Tue, 31 Jan 2012 13:19 GMT

Exxon Mobil, the oil giant, , reported fourth-quarter earnings of $9.4 billion, or $1.97 a share. Revenue was $121.6 billion. Analysts polled by Thomson Reuters expected earnings of $1.95 a share on revenue of $119.7 billion. In the year-earlier fourth quarter, Exxon earned $1.85 a share on revenue of $105 billion. Exxon said it repurchased $5 billion of stock in the first quarter.

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Solar Stocks That May Not Survive to 2014

twocents@thestreet.com (Eric Rosenbaum) — Tue, 31 Jan 2012 12:00 GMT

NEW YORK (TheStreet) - The market junk of 2011 have become the market jewels of 2012, whether it's Netflix, Bank of America, or just about any stock in the solar sector.

Is the rally merited in solar, a sector where supply is still running ahead of demand, and profitability -- even for the best-run manufacturing operations -- could be slim to none in 2012? ...

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TheStreet Ratings Top 10 Rating Changes

twocents@thestreet.com (Kevin Baker) — Mon, 30 Jan 2012 17:00 GMT

NEW YORK (TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,700 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.

TheStreet Ratings released rating changes on 67 U.S. common stocks for week ending January 27, 2012. 53 stocks were upgraded and 14 stocks were downgraded by our stock model.

Rating Change #10 ...

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Consumers Confident, Sick of Expensive Gas

twocents@thestreet.com (Andrea Tse) — Mon, 30 Jan 2012 16:56 GMT

NEW YORK (TheStreet) -- U.S. gasoline demand continues to decline despite the country's steady improvement in consumer confidence.

The Rasmussen daily consumer sentiment index, for instance, has risen to almost a 12-month high at 80.5 from 58.1 in mid-October last year -- the lowest reading since the worst of the recent recession in early 2009.

However, U.S. gasoline usage has actually fallen in a similar period. In the most recent four-week period on record, the economy used an average of 8.49 million barrels of gasoline a day, which is a decline from the four week moving average of 8.825 million barrels a day in mid-October, according to the Department of Energy. ...

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The Next Great Alternative Energy Short Is...

twocents@thestreet.com (Eric Rosenbaum) — Mon, 30 Jan 2012 15:59 GMT

NEW YORK (TheStreet) -- What does an analyst who was synonymous with the big solar stock short do for an encore? The answer is to find a way to short excessive excitement about the electric car market.

On Monday, Axiom Capital analyst Gordon Johnson, who had a long-time, very vocal and very profitable short on First Solar, launched coverage of battery maker Polypore at a sell. Polypore makes separators that are critical in regulating the flow of ions in batteries, including the lithium ion batteries now being developed for the electric car market. There will be blood among suppliers of battery technology to the electric car market: analyst.

Shares of Polypore, which have risen 21% this year -- and up from a 52-week low -- were down 6% on Monday morning to $53. ...

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Oil Prices Fall Below $100 on Muted Iranian Threats

twocents@thestreet.com (Andrea Tse) — Mon, 30 Jan 2012 14:11 GMT

NEW YORK (TheStreet) -- Oil prices were slinking lower Monday morning as market sentiment weakened ahead of a European summit and Iran postponed its threats to ban oil exports.

West Texas Intermediate (WTI) light sweet crude oil for March delivery was falling 44 cents to $99.12 a barrel, while the March European Brent crude contract was down 9 cents to $111.37. This, as the U.S. dollar index added 0.6% to $79.28.

General investor sentiment was taking a hit from the lack of an absolute guarantee on a second bailout package for Greece from the International Monetary Fund and European partners to protect the country from a disastrous default on its debt. While a debt swap deal between Greece and its private investors, on which the second bailout depends, is in a progress, a final agreement hasn't yet been reached. Meanwhile, a European Union summit is taking place today in Brussels for a sign off on a permanent rescue fund for the euro zone. ...

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