Weekend Edition
The Best of The S&A Digest
June 13, 2009
 We wrote it, did you buy it?
The major oil companies are lined up at Iraq's doorstep like football fans outside a beer stand at halftime. It's all the usual suspects: ExxonMobil, ConocoPhillips, British Petroleum, and Royal Dutch Shell companies with nearly a century of history in Iraq. However, this time there are some giant newcomers.
China's national oil companies Sinopec, Sinochem, and China National Offshore Oil Corp. will be part of the bidding process. – Matt Badiali, May 2009, S&A Oil Report
Last month, Matt's subscribers took advantage of the interest in Iraqi oil through Addax Petroleum, a $4 billion Canadian oil company with operations primarily in Africa and the Middle East. The company owns stakes in two Iraqi oilfields comprising 20% of its total reserves. And its reserves are incredibly cheap at half the worldwide average due to perceived political risks.
Addax is preparing to drill into a potentially giant oilfield, called Sangaw North, this summer. The additional reserves could send the share price soaring. As Matt wrote...
Iraq has 12 fields with more than 1 billion barrels at discovery, seven with more than 2 billion barrels, and five with more than 5 billion barrels... A 5 billion-barrel field would add 1 billion barrels... and represent a 200% gain on the shares.
But we may not get the chance to share those riches... Last Monday, the South China Morning Post reported China's state-owned oil company, Sinopec, was considering an $8 billion bid for Addax. China National Petroleum Corp and CNOOC are also interested in Addax, as is the Korean National Oil Company. As Matt predicted, the major Asian oil producers want in on Iraqi oil, we just didn't expect them to take over our recommendation...
Addax publicly responded to the announcements, saying it had held "preliminary discussions" with a possible acquirer... and shares jumped double digits. Oil Report readers are now sitting on a 25% gain on their shares in one month... But the takeover talks are just beginning, and we'll likely see 100% or more on Addax once the deal closes.
Matt's most recent Oil Report recommendation is a major player in the booming Chinese silver industry. This company has doubled its silver production in the past two years (an amazing feat), and it has nearly quintupled its resource base to 198 million ounces in just four years but it's just getting started. The company is building a new mine that could add 40% to 50% to its production in the next two years.
Plus, it is one of the lowest-cost silver producers in the world. It actually earns $2 per ounce of silver it mines before it even sells the metal.
Despite its enormous growth potential, the market is pricing this company at a ridiculously low multiple. Its competitors trade in the neighborhood of 25 times earnings. Currently, Matt's recommendation trades for 10 times earnings. If it simply trades in line with competitors not accounting for any future growth subscribers will more than double their money.
If you're looking for a way to enter the precious metals market, this is the company for you. It's safe (zero debt) and could easily return over 100% this year. To learn more about the S&A Oil Report, and access Matt's recent report, click here...
According to a recent Bloomberg story, more than 150 companies raised $82.2 billion in new equity last quarter a faster pace of equity issuance than at the height of the equity bubble in 2000.
The S&P 500's total shares have grown 3.4% since March 31, meaning earnings are now divided by a larger number... making earnings per share into a smaller number. Standard & Poor's has reduced its 2009 earnings-per-share estimate to $57.23. With the S&P 500 around 940, it's selling for over 16 times earnings. That's historically about average.
Comrade Obama's latest stimulus plan is to use your hard-earned dollars to buy new cars for your neighbor. The U.S. House approved legislation that would give citizens up to $4,500 to turn in their old car and buy a new, more fuel-efficient model. The "cash-for-clunkers" proposal would replace 1 million older vehicles for a grand total of 4.5 billion tax dollars down the drain.
Brian Hunt and Tom Dyson just marked their first 200% gain in our new Penny Trends service.
Penny Trends trades the market's fastest-moving growth stocks. It's performing spectacularly well. We believe we have a one- to two-year window open right now to make large gains in the market's smallest companies.
One of the service's first recommendations, Venoco, is up 200% in just a few months. It's a microcap oil play we're using to ride the uptrend in crude. You want to play the uptrend in copper? The guys are up 125% on Taseko Mines. They're also making nice gains in emerging-market stocks and gaming stocks.
And they just revealed the market's next "moonshots" with recent picks in the gold-mining sector. You can learn more about Hunt and Dyson's unique strategy here.
Regards,
S&A Research
Stansberry & Associates produces the daily S&A Digest, which comes free with a subscription to one of our premium products. To learn more about a risk-free trial subscription click here. |
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S&P 500 |
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SLM Corporation |
SLM |
+44.25% |
AK Steel |
AKS |
+41.22% |
KeyCorp |
KEY |
+29.78% |
Countries |
|
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Australia |
EWA |
+5.93% |
India |
IIF |
+4.84% |
Thailand |
TTF |
+4.10% |
Sectors |
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Steel |
SLX |
+6.30% |
Coal |
KOL |
+4.46% |
Semiconductors |
PSI |
+4.36% |
Commodities |
|
|
Lead |
- |
+8.94% |
Zinc |
- |
+8.94% |
Aluminum |
- |
+8.50% |
|
S&P 500 |
|
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Abercrombie & Fitch |
ANF |
-16.09% |
Verisign |
VRSN |
-15.58% |
Ameriprise Financial |
AMP |
-12.59% |
Countries |
|
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Russia |
TRF |
-3.36% |
Taiwan |
EWT |
-2.89% |
Hong Kong |
EWH |
-1.92% |
Sectors |
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Real Estate |
IYR |
-3.98% |
Defense |
PPA |
-2.50% |
Insurance |
PIC |
-1.63% |
Commodities |
|
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Kansas Wheat |
- |
-6.59% |
Coffee |
- |
-6.38% |
Silver |
- |
-5.46% |
Source: Bloomberg and Yahoo, 6/4–6/11.
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