27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
A new report by Susquehanna Financial Group analyst Biju Perincheril focuses on exploration and production (E&P) stocks and what investors can expect from the oil industry in coming months. After a disastrous past 12 months, Perincheril now believes that the valuations of many E&P stocks are finally starting to look “more reasonable.”
Lowered Expectations
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In the report, Susquehanna lowered its long-term outlook for WTI oil prices from $75/bbl to $65/bbl. In addition, the firm lowered its outlook for HH natural gas prices from $4.00/mmbtu to 3.50/mmbtu. Susquehanna believes that this updated price forecast better reflects the realities of the current commodity environment.
Whiting Upgrade
Considering the firm’s updated oil & gas price forecasts, many E&P stocks seem reasonably valued given their severely depressed share prices.
In the report, Susquehanna added Whiting Petroleum Corp (NYSE: WLL) to the list of reasonably-valued stocks, upgrading the stock from Neutral to Positive and setting a $33 price target.
“Drivers include the company’s reserve growth potential via its positions in the Bakken and Niobara, and improvement in capital efficiency due to its focus on enhanced completions,” Perincheril explained.
Other Value Picks
Whiting isn’t the only E&P stock that Susquehanna sees as a value play at current prices. While many E&P names have seen major pullbacks in price over the past year, Perincheril warns that low share price doesn’t necessarily mean low-risk.
Susquehanna is still avoiding many E&P names with “high leverage and/or marginal assets.”
Susquehanna names Newfield Exploration Co. (NYSE: NFX), Continental Resources, Inc. (NYSE: CLR) and Devon Energy Corp (NYSE: DVN) as preferred oil names and Gulfport Energy Corporation (NASDAQ: GPOR) as the firm’s preferred gas play.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.