Look for Growth in the Permian

 | May 07, 2014 | 6:53 PM EDT
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So, where does a growth hound go to get actual growth that pays off? I think they go to the Permian Basin, that's where.

Three of my favorite oil companies, Pioneer (PES), Cimarex (XEC) and EOG (EOG) all talked incredibly positively about the Permian and it's a big reason why each has such spectacular growth (EOG being the leader with an astounding 42% oil and condensate production boost).    

Now, this has been a remarkable couple of weeks for the oils. We have tensions in Russia that could hurt worldwide production. We have the weak dollar boosting the price of crude. We have some discoveries and rediscoveries that are being fleshed out in states like Wyoming and West Virginia that suggest we still have so much growth ahead.

We all know the volatility of these stocks. You get three down days of oil and these stocks trade like broken dandelions twisting in the wind. They are also being bid up by momentum guys, who seem to have come right out of FireEye (FEYE) and Splunk (SPLK).

So, I wouldn't chase because if you catch them on a swoon it does take forever for them to come back (although they always seem to).

But be aware that they are where the real growth is right now, not 3D printing or new prescriptions or software as a service for anything.

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