George Soros is a macro investor: He looks at the big picture, identifies a theme… and then homes in on the best way to profit from that theme.  #-ad_banner-#His strategy involves looking at government and central bank policies, industry trends, and the economy — but one tactic that he has typically avoided is activist investing. Soros usually leaves that for the likes of Carl Icahn, Bill Ackman and Dan Loeb.  However, when Soros — with a net worth of $25 billion — decides to become a company’s largest shareholder and assume an activist role, he should not be taken lightly. … Read More

George Soros is a macro investor: He looks at the big picture, identifies a theme… and then homes in on the best way to profit from that theme.  #-ad_banner-#His strategy involves looking at government and central bank policies, industry trends, and the economy — but one tactic that he has typically avoided is activist investing. Soros usually leaves that for the likes of Carl Icahn, Bill Ackman and Dan Loeb.  However, when Soros — with a net worth of $25 billion — decides to become a company’s largest shareholder and assume an activist role, he should not be taken lightly.  Soros has taken on just such a role with Penn Virginia (NYSE: PVA).  Over the years, Penn Virginia has shifted from being a pure natural gas company to one focused on oil and higher-value natural gas liquids. The company remains one of the best-positioned companies in the Eagle Ford shale formation in South Texas. Soros became Penn Virginia’s largest shareholder in the first quarter of this year after disclosing a position of just over 9% in the company. The interesting part is what Soros said in his SEC filing. Where most activists go after management, Soros… Read More

The past five years have been a tumultuous period for U.S. natural gas prices. The widespread use of hydraulic fracturing (aka fracking) to release gas from shale formations revolutionized the industry, dramatically increasing production. As a result of this massive new supply, natural gas prices spiraled lower, briefly dropping below $2 per Mcf (thousand cubic feet) in April 2012. Since that time, spot prices have moved steadily higher as demand has slowly picked up to the point where the supply/demand imbalance is being resolved. #-ad_banner-#We saw a big spike in price this winter, as harsh weather led to… Read More

The past five years have been a tumultuous period for U.S. natural gas prices. The widespread use of hydraulic fracturing (aka fracking) to release gas from shale formations revolutionized the industry, dramatically increasing production. As a result of this massive new supply, natural gas prices spiraled lower, briefly dropping below $2 per Mcf (thousand cubic feet) in April 2012. Since that time, spot prices have moved steadily higher as demand has slowly picked up to the point where the supply/demand imbalance is being resolved. #-ad_banner-#We saw a big spike in price this winter, as harsh weather led to a sharp increase in demand. Prices then settled into a stable pattern near $4.50 per Mcf, which is a higher level than we have seen in the past few years. Companies engaged in natural gas production now have the benefit of selling at higher prices, resulting in wider profit margins. Shares of Ultra Petroleum (NYSE: UPL) look particularly interesting at this juncture, as the company is making some significant investments that will benefit from higher gas prices. In 2012 and 2013, Ultra Petroleum responded to falling natural gas prices by cutting spending on its drilling programs. The company reduced its… Read More

American oil production is surging. Yet oil prices remain near $100 a barrel.  You may be wondering: When will all of this additional production finally overtake demand and push the price of oil down? You can find one answer in the price of oil futures — which say we can expect oil to fall to closer to $80 in the coming few years and stay there. #-ad_banner-#Is the market correct? Are oil prices heading south? I think that the answer is no, for several reasons — especially after I listened to a… Read More

American oil production is surging. Yet oil prices remain near $100 a barrel.  You may be wondering: When will all of this additional production finally overtake demand and push the price of oil down? You can find one answer in the price of oil futures — which say we can expect oil to fall to closer to $80 in the coming few years and stay there. #-ad_banner-#Is the market correct? Are oil prices heading south? I think that the answer is no, for several reasons — especially after I listened to a recent presentation by Bill Thomas, the CEO and chairman of EOG Resources (NYSE: EOG).   EOG is, by a considerable margin, the largest horizontal oil producer in the world. That means the company has access to the best data available on horizontal oil production and resources. Put simply, EOG and Thomas believe that the futures market is all wrong about oil prices. The company is bullish on oil and focused on producing more of it. What EOG sees — and the market doesn’t seem to grasp — is that for all intents and purposes, the horizontal oil boom is coming… Read More

Personally, I’m long-term bullish on the price of oil — and because I’m bullish, I’m interested in companies that control massive deposits of crude. #-ad_banner-#I like to compare an investment in companies sitting on large stores of oil to owning land that lies beyond city limits. That land might not be worth much today — but once the city’s expanding borders reach that land, it could be worth a fortune. Similarly, rising oil prices and technological advances in oil recovery are like the city borders moving to where my land is. Higher prices and improving technology make recovering… Read More

Personally, I’m long-term bullish on the price of oil — and because I’m bullish, I’m interested in companies that control massive deposits of crude. #-ad_banner-#I like to compare an investment in companies sitting on large stores of oil to owning land that lies beyond city limits. That land might not be worth much today — but once the city’s expanding borders reach that land, it could be worth a fortune. Similarly, rising oil prices and technological advances in oil recovery are like the city borders moving to where my land is. Higher prices and improving technology make recovering more of the oil that producers are sitting on economically feasible. However, I wouldn’t invest in a producer solely because it has a big accumulation of oil in the ground. The company also has to be inexpensively priced relative to the value of its proven reserves and cash flow. Now, I’ve turned over quite a few rocks over the past couple of years looking for undervalued opportunities in the oil sector. I don’t know that I’ve come across many companies — if any — that trade at as large a discount to proven reserves and have the balance sheet that… Read More

The domestic energy sector has gotten more than it bargained for during the so-called U.S. energy boom — but in a good way if you view it from an economic standpoint.  #-ad_banner-#As part of the sector’s unprecedented success in extracting previously unattainable oil and gas reserves, there’s now a major oversupply of certain useful by-products. These by-products, which include propane, butane, ethane and other liquefied petroleum gases (LPGs), have value in North America, though prices are down due to the oversupply. But LPGs are in high demand and typically command premium prices overseas, especially in Europe and Asia. Read More

The domestic energy sector has gotten more than it bargained for during the so-called U.S. energy boom — but in a good way if you view it from an economic standpoint.  #-ad_banner-#As part of the sector’s unprecedented success in extracting previously unattainable oil and gas reserves, there’s now a major oversupply of certain useful by-products. These by-products, which include propane, butane, ethane and other liquefied petroleum gases (LPGs), have value in North America, though prices are down due to the oversupply. But LPGs are in high demand and typically command premium prices overseas, especially in Europe and Asia. So U.S. LPG exports appear set to keep soaring. Indeed, they could nearly triple by 2020 to almost 800,000 barrels per day from about 280,000 barrels per day in 2013, according to estimates from energy consultancy FACTS Global Energy Group. One company in particular is positioned to capitalize on this trend. It’s by far the leader in LPG transport through the smaller “handysize” tanker ships designed specifically to refrigerate and carry LPGs. The company’s fleet includes 24 such ships, giving it about a 30% market share in terms of the industry’s overall transport capacity, compared with 7% for its nearest… Read More

For several decades, clean technology supporters have waited for the day when solar power truly achieved “grid parity.”  #-ad_banner-#Everyone understood that this promising renewable form of energy needed to eventually compete with nuclear, oil, coal and gas — without any government subsidies. Much faster than anyone expected, we’re almost there. The cost to produce solar panels has dropped so fast, and the energy conversion ratio of solar panels has risen ever higher, that government subsidies are beginning to phase out, which is unlikely to slow down the torrid growth for solar. Some of the juice created by solar power (and… Read More

For several decades, clean technology supporters have waited for the day when solar power truly achieved “grid parity.”  #-ad_banner-#Everyone understood that this promising renewable form of energy needed to eventually compete with nuclear, oil, coal and gas — without any government subsidies. Much faster than anyone expected, we’re almost there. The cost to produce solar panels has dropped so fast, and the energy conversion ratio of solar panels has risen ever higher, that government subsidies are beginning to phase out, which is unlikely to slow down the torrid growth for solar. Some of the juice created by solar power (and wind, geothermal and micro-turbines) will be fed back into the grid, especially where two-way power meters are installed, but much of the excess power we generate will simply be uncaptured and frittered away. That’s why engineers continue to work hard to develop new ways to store energy, tinkering with virtually every kind of known battery chemistry and coming up with unusual ways to bottle up power for future use.  How bad is the problem?  When clean energy sources such as solar or wind are producing peak power, they can create too much supply for grid operators, who essentially must give away… Read More

Warren Buffett needs no introduction. His stock-picking ability over the past several decades is without equal.  #-ad_banner-#Many investors tend to focus on his mega-cap stocks, such as Coca-Cola (NYSE: KO), or one of his rare tech holdings, IBM (NYSE: IBM) — but there are, of course, other great investments to be found in his portfolio. One stock that he owns that doesn’t get much attention is Phillips 66 (NYSE: PSX). Buffett’s Berkshire Hathaway (NYSE: BRK-B) owns just under 5% of the company. (Last summer, my colleagues here at StreetAuthority found that PSX is a favorite of both Buffett… Read More

Warren Buffett needs no introduction. His stock-picking ability over the past several decades is without equal.  #-ad_banner-#Many investors tend to focus on his mega-cap stocks, such as Coca-Cola (NYSE: KO), or one of his rare tech holdings, IBM (NYSE: IBM) — but there are, of course, other great investments to be found in his portfolio. One stock that he owns that doesn’t get much attention is Phillips 66 (NYSE: PSX). Buffett’s Berkshire Hathaway (NYSE: BRK-B) owns just under 5% of the company. (Last summer, my colleagues here at StreetAuthority found that PSX is a favorite of both Buffett and T. Boone Pickens.) Spun off from ConocoPhillips (NYSE: COP) in 2012, Phillips 66 is one of the largest oil refiners and marketers in the U.S. It has a strong return on equity at 15%, its valuation is compelling, and it pays a solid dividend.  At the Ira Sohn Investment Conference this month, Zach Schreiber, CEO of hedge fund PointState Capital, made a case for taking a long position in refining companies. Schreiber expects the price of West Texas Intermediate (WTI) crude oil to fall in the next few years — and fall hard.  That’s because… Read More

It’s not too late to make a lot of money from the American Energy Boom. If we’re right, the chance to earn blockbuster gains investing in this incredible story has only just begun. Here’s what you need to know… The American Energy Boom hardly needs an introduction. Most people are aware that due to technologies like horizontal drilling and hydraulic fracturing, the United States is now awash with new sources of oil and natural gas. These developments have made America the largest producer of energy in the world. #-ad_banner-#As you’d imagine, a lot of money can be been made investing… Read More

It’s not too late to make a lot of money from the American Energy Boom. If we’re right, the chance to earn blockbuster gains investing in this incredible story has only just begun. Here’s what you need to know… The American Energy Boom hardly needs an introduction. Most people are aware that due to technologies like horizontal drilling and hydraulic fracturing, the United States is now awash with new sources of oil and natural gas. These developments have made America the largest producer of energy in the world. #-ad_banner-#As you’d imagine, a lot of money can be been made investing alongside this trend… For example, EOG Resources Inc. (NYSE: ROG) is up 292% since 2009…. Continental Resources (NYSE: CLR) has soared over 800%… and Rex Energy (NYSE: REXX) has returned a staggering 1,200% over the same period. All of these companies were among the first major players in the American Energy Boom. The problem is that it’s becoming harder and harder to find prospects like these in the exploration and production space. This story has been going on for over five years and by this point there simply aren’t many good buys left. As a testament to my point, EOG… Read More

We’ve learned a clear lesson over the past 12 months: There is no sense in hopping into momentum stocks after they’ve doubled or tripled in value in a short time.  #-ad_banner-#That was the sobering lesson around 3-D printing stocks, popular IPOs and, more recently, fuel cell stocks. When I looked at fuel cell stocks a month ago, I asked whether they were in a bubble, and concluded that “this is a great group to put on your watch list, as any major pullback would provide excellent entry points.” Well, your ship has come in: Fuel cell stocks are dropping like a… Read More

We’ve learned a clear lesson over the past 12 months: There is no sense in hopping into momentum stocks after they’ve doubled or tripled in value in a short time.  #-ad_banner-#That was the sobering lesson around 3-D printing stocks, popular IPOs and, more recently, fuel cell stocks. When I looked at fuel cell stocks a month ago, I asked whether they were in a bubble, and concluded that “this is a great group to put on your watch list, as any major pullback would provide excellent entry points.” Well, your ship has come in: Fuel cell stocks are dropping like a stone. They had already been pulling back when I looked at them last month — and now they’ve now all lost roughly half their value since mid-March. In retrospect, the group sell-off was inevitable. These stocks were pushed ever higher under the “greater fool theory,” which states that a price can be justified by a rational buyer under the belief that someone else is willing to pay an even higher price. Of course, the moment that people believe that this circular logic has come to an end, everyone heads for the exits at once. These… Read More

Several decades ago, mutual fund managers such as Fidelity’s Peter Lynch and Legg Mason’s Bill Miller garnered a great deal of attention from investors and the financial media. #-ad_banner-#These days, it’s the hotshot hedge fund managers, with their epic battles against companies such as Herbalife (NYSE: HLF) or Green Mountain Coffee Roasters (Nasdaq: GMCR), that get all the buzz. Proxy fights and bold short sale claims can be entertaining to watch and sometimes even create value for investors.  Yet investing shouldn’t be about drama.  Those now-obscure mutual fund managers deserve a lot more attention than they deserve, even if they rarely… Read More

Several decades ago, mutual fund managers such as Fidelity’s Peter Lynch and Legg Mason’s Bill Miller garnered a great deal of attention from investors and the financial media. #-ad_banner-#These days, it’s the hotshot hedge fund managers, with their epic battles against companies such as Herbalife (NYSE: HLF) or Green Mountain Coffee Roasters (Nasdaq: GMCR), that get all the buzz. Proxy fights and bold short sale claims can be entertaining to watch and sometimes even create value for investors.  Yet investing shouldn’t be about drama.  Those now-obscure mutual fund managers deserve a lot more attention than they deserve, even if they rarely enjoy being in the spotlight. Thankfully, the mutual fund analysts at Morningstar single out the best and brightest mutual fund managers every year, helping steer investors toward the savviest stock pickers in the field.  A current favorite: Los Angeles-based First Pacific Advisors (FPA). Morningstar anointed Steve Romick, the fund manager behind the FPA Crescent Fund (Nasdaq: FPACX), as the “2013 Asset Allocation Manager of the Year.” That five-star fund gets a “gold” rating from Morningstar.  As Morningstar notes, “Romick seeks securities trading at a substantial discount to what he believes they’re worth. When opportunities are scarce, he will let cash… Read More