‘Evil Energy’ Evaluation

Written by GSCR Staff   
Thursday, 26 February 2015 07:47

On Monday, fossil fuels were dealt a big blow by the POTUS, as he vetoed the Keystone XL pipeline bill, just as he promised he would.

Mr. Obama appears to be content on doubling down on all of his agenda items, including ending oil, gas, and coal production in the U.S., just months after being dealt the second mid-term ‘shellacking’ of his presidency. This move is even more dumbfounding when you consider that even conservative estimates were for 40,000 jobs gained and the State Department deemed that it would have no long term impact environmentally. Not sure the global warming argument is going to win many folks over in what has been the coldest February in 100 years in a majority of the country.

 

Why is this important? The chart below illustrates the YTD performance of two of our Market Monitor picks from January 9th this year, CSI Compressco, LP (NASDAQ – CCLP - $16.40) and Cypress Energy Partners, LP (NYSE – CELP - $19.16) compared to iShares Russell 2000 ETF (NYSE – IWM - $122.80).

 

CCLP and CELP Charts YTD vs. IWM

(Source: www.otcmarkets.com)

 

MM.02.26.15.CCLP-CELP

 

 

CCLP is up nearly 23% since our feature and CELP is up over 43%. Many investors have piled into these stocks looking to buy cheap oil and gas per our original thesis. We believe this political setback will not impact either of these stocks significantly. Yesterday was basically a wash as CCLP was up just over 1% and CELP was down just 0.35%. Both of these companies provide goods and services that are not tied directly to the pipeline. We called for $20 this year for both and are sticking to it.It should be noted thatCELP is nearing $20 and not getting greedy maybe the attitude to take once this occurs by taking profits or using options to lock in gains.

 

Another over politicized industry from the green folks like the POTUS is coal. One of our favorites continues to get slaughtered because of this atmosphere.Peabody Energy Corporation (NYSE – BTU - $7.93)is down over 53% over the last year. This stock was at $88 before the Great Recession crash but amazingly enough, the EMA technical analysis is very bullish here. This maybe more a bet on who will win the 2016 presidential election at this point. Waiting until the stock moves belowr $5 to buy could present a once in a lifetime opportunity.

 

Have a great day!

 

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

Disclaimer:

This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. 

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations. 

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small CapResearch blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLECONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS   INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLECONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com

 

Add comment
  • No comments found