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JimVanMeerten (62.19)

Foreign energy independence

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January 06, 2010 – Comments (1) | RELATED TICKERS: VNR

Everywhere we turn these days talking heads and politicians are harping about finding new ways to make sure the US isn't dependent on foreign oil and energy sources. Others are telling us that oil isn't the answer and natural gas is the way of the future. Well today my favorite stock to add to my Wall Street Survivor portfolio is Vanguard Natural Resources -- VNR.

The stock came up on my radar while I was using Barchart to screen for stocks hitting the most frequent new highs and this one hit the top of my list with 17 new price advances in the last 20 trading sessions and 4 new highs in the last 5 days. The stock has had a 44.32% price appreciation in the last 65 days and has buy signals on 12 of Barchart's 13 technical indicators for a 96% buy rating.

What made me fall in love with this stock is that it has what everyone seems to be looking for these days. They focus on the acquisition, exploitation and development of both natural gas and oil properties in the US. Most of their natural gas reserves are located in the southern portion of the Appalachian Basin, primarily in southeast Kentucky and northeast Tennessee. We don't have to worry about foreign interests and since they explore for both oil and gas we can have it either way.

On a fundamental basis this stock makes money and has a following. 6 brokerage firms follow the stock and 4 have buy recommendations with the other 2 a hold. No sell recommendations. The consensus is for a 30.4% increase in revenue next year and a 9.9% growth in earnings per share.

Before I put in my buy order I decided to check the other sites and Wall Street Survivor members have a 5/5 Survivor Sentiment rating, with a 4/5 fundamental and 5/5 technical rating. On Motley Fool CAPS members think the stock will out perform the market by a vote of 170 to 11 with the All Stars in agreement 61 to 1. The 3 Wall Street columnist that Fool follows like it 3 to 0.

I want to make a major point here before I receive criticism from any of you who are reading me for the first time. I try to find the stocks on my own. I do not buy them because they are popular with the analysts or other sites. I use these sources as a sounding board. If I want to buy a stock I look to see if others are trashing it. If I like it but others don't then I give it a second look to see it they saw something negative that I was missing. I just like to have that second and third opinion but I make my own finds.

This stock has what I like:
1 - The stock is hitting new highs better than 50% of the recent trading sessions

2 - The stock has a following with no major trash talking

3 - Other sites have a similar favorable opinion

Recommendation: I'm adding VNR to my Wall Street Survivor portfolio around 23.25 with a protective stop loss of not less than 19.

Disclosure: I hold no positions in VNR at the time of this publication.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

1 Comments – Post Your Own

#1) On January 06, 2010 at 4:13 PM, leohaas (32.07) wrote:

"The stock came up on my radar while I was using Barchart to screen for stocks hitting the most frequent new highs and this one hit the top of my list with 17 new price advances in the last 20 trading sessions and 4 new highs in the last 5 days. The stock has had a 44.32% price appreciation in the last 65 days and has buy signals on 12 of Barchart's 13 technical indicators for a 96% buy rating."
I've said it before, and will say it again: this approach looks like performance chasing. If this really is such a good company, why not wait until a pullback to buy it?

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