oil prices
SASOL LTD. (ADR) $52.96 (New York symbol SSL; TSINetwork Rating: Extra Risk) (082- 883-9697; www.sasol.com; ADRs outstanding: 649.9 million; Market cap: $36.6 billion; Dividend yield: 2.8%) is the world’s largest producer of fuel from coal at its facility in Secunda, South Africa. It also makes synthetic fuels from natural gas at plants in Qatar and Nigeria.
In addition, Sasol has substantial chemical production interests and produces oil and gas in Africa. It’s also South Africa’s thirdlargest coal producer.
In Sasol’s 2014 fiscal first half, which ended December 31, 2013, its revenue rose 23.1%, to 98.3 billion South African rand (1 rand = $0.10 U.S.) from 79.9 billion rand in the first half of fiscal 2013.
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In addition, Sasol has substantial chemical production interests and produces oil and gas in Africa. It’s also South Africa’s thirdlargest coal producer.
In Sasol’s 2014 fiscal first half, which ended December 31, 2013, its revenue rose 23.1%, to 98.3 billion South African rand (1 rand = $0.10 U.S.) from 79.9 billion rand in the first half of fiscal 2013.
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Recent events in Ukraine leave me with a pleasing sense of déjà vu. This goes back to the early 1960s. I had a number of friends back then who had left Hungary as refugees after the failed revolution of 1956. I had read about conditions in the communist world, of course. But hearing about it from friends who had lived through it made it much more tangible. With those memories in mind, the Eastern European revolutions of 1989 seemed like a wonderful thing. When the Eastern European revolutions broke out, I often stayed up until the early hours of the morning, watching live CNN coverage of events then going on in the former Soviet bloc—the destruction of the Berlin Wall, the non-violent crowds standing up to the dictators, and the on-the-scene discussions of political changes that were likely to follow. I felt a strong personal connection to the changes. But I also had a professional interest. The collapse of communism was likely to be great for the world, and in particular for the stock market. The spread of political and economic liberty, and of the free enterprise system, was bound to lead to greater wealth for all....
TRILOGY ENERGY CORP. $26.56 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290- 2900; www.trilogyenergy.com; Shares outstanding: 99.4 million; Market cap: $3.3 billion; Dividend yield: 1.6%) owns oil and gas properties in central Alberta’s Kaybob and Grande Prairie areas....
In late 2012 and early 2013, Alberta’s heavy oil, or bitumen, was trading at a discount of around $40 U.S. a barrel to U.S. benchmark West Texas Intermediate (WTI) light crude. Bitumen from the oil sands is a thick, tar-like form of oil that requires more processing than regular crude. The lower price for Canadian bitumen was mostly due to a lack of pipeline and refinery capacity. As well, increased U.S. light oil production drove down the price of Alberta’s harder-to-process heavy oil. Since then, though, the discount has narrowed: earlier this month, Alberta oil sold for $19.50 U.S. a barrel less than U.S. benchmark WTI light crude....
TRILOGY ENERGY CORP. $26.56 (Toronto symbol TET; TSINetwork Rating: Speculative) (403-290- 2900; www.trilogyenergy.com; Shares outstanding: 99.4 million; Market cap: $3.3 billion; Dividend yield: 1.6%) owns oil and gas properties in central Alberta’s Kaybob and Grande Prairie areas. About 58% of Trilogy’s production is natural gas. The remaining 42% is oil.
In the three months ended September 30, 2013, Trilogy produced 31,211 barrels of oil equivalent a day (including gas), down 6.6% from 33,412 barrels a year earlier. Cash flow per share rose 15.0%, to $0.46 from $0.40, on higher oil prices.
The company plans to spend $375 million on exploration and development this year, down 6.3% from the $400 million it likely spent in 2013. As well, it’s now focusing on its shale oil prospects at Kaybob and spending less on its more mature oil pools in the same area.
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In the three months ended September 30, 2013, Trilogy produced 31,211 barrels of oil equivalent a day (including gas), down 6.6% from 33,412 barrels a year earlier. Cash flow per share rose 15.0%, to $0.46 from $0.40, on higher oil prices.
The company plans to spend $375 million on exploration and development this year, down 6.3% from the $400 million it likely spent in 2013. As well, it’s now focusing on its shale oil prospects at Kaybob and spending less on its more mature oil pools in the same area.
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We’ve chosen Newell Rubbermaid as our Stock of the Year for 2014.
Our 2014 choice gives you a prime example of how we apply part three of our three-pronged investing approach, which is to downplay or avoid stocks in the broker/media limelight. (The other two parts are to invest mainly in well-established stocks, and to spread your money out across the five main economic sectors).
Newell makes a variety of everyday items, such as trash cans and food-storage containers....
Our 2014 choice gives you a prime example of how we apply part three of our three-pronged investing approach, which is to downplay or avoid stocks in the broker/media limelight. (The other two parts are to invest mainly in well-established stocks, and to spread your money out across the five main economic sectors).
Newell makes a variety of everyday items, such as trash cans and food-storage containers....
ENERPLUS CORP. $18.97 (Toronto symbol ERF; Shares outstanding: 202.1 million; Market cap: $3.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.7%) produces an average of 87,729 barrels of oil equivalent a day (52% gas and 48% oil).
The company’s properties are mainly in Alberta, Saskatchewan, B.C., North Dakota and Montana, as well as the Marcellus Shale, which passes through Pennsylvania, New York, Ohio and West Virginia.
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ARC RESOURCES $28.78 (Toronto symbol ARX; Shares outstanding: 313.6 million; Market cap: $9.2 billion; TSINetwork Rating: Speculative; Dividend yield: 4.2%; www.arcresources.com) produces oil and natural gas in Western Canada. The company’s average daily output of 94,915 barrels of oil equivalent (including gas) is weighted 62% to gas and 38% to oil.
In the quarter ended September 30, 2013, ARC’s cash flow per share rose 29.1%, to $0.71 from $0.55 a year earlier. Production gained 5.6%, plus its gas prices rose 20.0% and oil prices increased 24.6%.
ARC’s long-term debt is $739.8 million, or a low 8.0% of its market cap. It trades at 8.6 times its forecast 2014 cash flow of $3.36 a share.
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In the quarter ended September 30, 2013, ARC’s cash flow per share rose 29.1%, to $0.71 from $0.55 a year earlier. Production gained 5.6%, plus its gas prices rose 20.0% and oil prices increased 24.6%.
ARC’s long-term debt is $739.8 million, or a low 8.0% of its market cap. It trades at 8.6 times its forecast 2014 cash flow of $3.36 a share.
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NEWELL RUBBERMAID INC. $30 (New York symbol NWL; Aggressive Growth and Income Portfolios, Consumer sector; Shares outstanding: 287.2 million; Market cap: $8.6 billion; Priceto- sales ratio: 1.5; Dividend yield: 2.0%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, window blinds, pens and many other household goods.
The company has five divisions: Writing makes pens and markers (30% of sales, 46% of earnings); Home Solutions makes foodstorage and cooking products (28%, 24%); Tools makes hand and power tools and accessories (14%, 8%); Commercial Products makes cleaning supplies (14%, 11%); and Baby & Parenting makes high chairs, car seats and other goods for infants (14%, 11%).
Newell owns some the top brands in these markets, including Sharpie markers, Parker and Paper Mate pens, Calphalon cookware, Levolor blinds, Irwin tools and Graco car seats and strollers.
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The company has five divisions: Writing makes pens and markers (30% of sales, 46% of earnings); Home Solutions makes foodstorage and cooking products (28%, 24%); Tools makes hand and power tools and accessories (14%, 8%); Commercial Products makes cleaning supplies (14%, 11%); and Baby & Parenting makes high chairs, car seats and other goods for infants (14%, 11%).
Newell owns some the top brands in these markets, including Sharpie markers, Parker and Paper Mate pens, Calphalon cookware, Levolor blinds, Irwin tools and Graco car seats and strollers.
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Natural gas prices are now at $4.50 U.S. per thousand cubic feet. That’s more than double their low of $1.82 in April 2012.
The long-term outlook for gas demand and prices is positive, but prices could move sideways, or even down, in the short term. The best way to profit and cut your risk is to invest in companies that are steadily increasing their production and cash flow.
Here are two producers with strong growth prospects and attractive dividend yields.
ARC RESOURCES $28.78 (Toronto symbol ARX; Shares outstanding: 313.6 million; Market cap: $9.2 billion; TSINetwork Rating: Speculative; Dividend yield: 4.2%; www.arcresources.com) produces oil and natural gas in Western Canada....
The long-term outlook for gas demand and prices is positive, but prices could move sideways, or even down, in the short term. The best way to profit and cut your risk is to invest in companies that are steadily increasing their production and cash flow.
Here are two producers with strong growth prospects and attractive dividend yields.
ARC RESOURCES $28.78 (Toronto symbol ARX; Shares outstanding: 313.6 million; Market cap: $9.2 billion; TSINetwork Rating: Speculative; Dividend yield: 4.2%; www.arcresources.com) produces oil and natural gas in Western Canada....