• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Energy

A Pair of Mid-Term Energy Plays

Noble and Devon have the potential to make a good year great.
By DANIEL DICKER Apr 07, 2014 | 11:00 AM EDT
Stocks quotes in this article: APC, NBL, DVN, TSO, XEC, BP

Anadarko (APC) settlement of Tronox liabilities last week represented a giant leap for that U.S. oil-exploration company's shares -- and for me, too. I recommended Anadarko on Feb. 13 and again on March 6, but this isn't a victory lap. It's a chance to learn how I play the energy and stock-picking game these days and where I find the most success ¿ and where you can find it too.

One or two trades usually determine how good a year I'll have. Looking back over the last several years since leaving the oil pits at the New York Mercantile Exchange, a pattern has become very clear: I am no longer as good a short-term trader as I was when I made my career as one. In the course of a year, I will have dozens of short-term trades, yes, but a pattern emerges that other mid-term ideas give me the most bang for the buck.

It was BP (BP) in 2010, playing the recovery trade from Deepwater Horizon. It was Tesoro (TSO) in 2012, figuring out the explosion in Brent crude and West Texas Intermediate spreads were going to lead to a bonanza for refiners. In 2013, it was Cimarex (XEC), finding a relatively unknown exploration-and-production company executing in the red-hot Permian.

There was unrecognized underlying value in all these cases, but they needed time and patience to develop. These are the ideas we want to find -- the ones that will yield the best profits.

Notice, also, that there is almost no speculative drive in these kinds of picks: BP or Anadarko weren't likely bankruptcies, Tesoro wasn't about to lose its gasoline concession and Cimarex had solid books, even if it fell flat in the Wolfcamp shale. There are speculative stocks that you can lose everything in -- go broke and take your investment dollar almost entirely away. Occasionally, I will also recommend and buy them for myself. But recognizing the difference in risk is imperative. The less speculative, value-oriented mid-term plays should get the majority of your available investment dollars. They're the ones that will make or break your trading year -- at least they have for me.

So what stocks am I looking at now? There are two, and they'll be hardly a surprise to those who follow me: Noble Energy (NBL), which is still waiting for the game-changing Levant basin natural gas to affect Mediterranean and Eastern Europe, and Devon Energy (DVN), a stock I finally enjoy owning but the company is still relatively unrecognized for its liquids turnaround in the last two years.

With Anadarko, I've already had a good year. But these two have the potential to make it a great one.

I want to know your picks, too. Send your mid-term energy value plays to Dan.Dicker@thestreet.com and I'll analyze them next week.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Dicker was long APC, NBL and DVN, although positions may change at any time.

TAGS: Investing | U.S. Equity | Energy

More from Energy

Don't Waste Energy Divining Energy's Future; Ride With LNG Shippers Instead

Jim Collins
Jan 21, 2021 10:30 AM EST

A hot market for liquefied natural gas makes companies that transport the fuel sensible plays at a time when oil is demonized.

Renewable Energy Group Is Set to Drive to New Highs

Bruce Kamich
Jan 21, 2021 10:08 AM EST

REGI is the nation's largest biodiesel maker.

At What Price Is Ballard Power Systems a Buy?

Bruce Kamich
Jan 15, 2021 3:09 PM EST

Let's check out the latest charts of BLDP.

Time to Nail Down Some Profits on Halliburton

Bruce Kamich
Jan 14, 2021 10:47 AM EST

Our latest technical analysis and trading strategy for the oil services stock.

A Rising Tide Is Going to Lift LNG Shippers in a Very Cold Winter

Jim Collins
Jan 14, 2021 10:30 AM EST

Also, my take on Jack Dorsey and Twitter, along with Facebook.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    I discuss price targets in my Saturday column.
  • 07:54 AM EST GARY BERMAN

    Friday Morning Fibocall for 1/22/2021

    SPX (Long-Term View) The 1/21/21 NEW high @ 3861...
  • 11:16 AM EST CHRIS VERSACE

    Worst Stocks to Buy for the Biden Presidency

    Biden's take on the minimum wage, likely moves on ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login