Al Gore gives the 'buy' signal of the century

When the former vice president warns of an 'oil bubble,' it's time to dive in. Here are 3 energy names to pick up now.

By Traders Reserve Oct 25, 2013 3:54PM

Al Gore in December 2011 (© MCMULLAN CO/SIPA/Rex Features)By Jamie Dlugosch

 

Al Gore thinks the oil market is a bubble of epic proportions.

 

Thank you very much, Mr. Vice President. You have just given us lowly minions the buy signal of the century.

 

It has been my experience that when personalities like Gore or so-called experts spout off about this and that being a bubble, I know to do the opposite. It may seem counterintuitive, but it’s not. Just think about the experts who were calling the Internet a bubble in 1995, 1996, 1997, 1998 and 1999.

 

My point is that even though the Internet was a bubble, it did not pop until many years after being so noted. The experts were right in calling it a bubble, but they were much too early to do so.

 

The profits gained by owning dot-com stocks built fortunes. The same is likely to happen in the oil space, and we now have Al Gore to thank for sparking the rally.

 

Gore’s argument, made in an interview on Yahoo Finance, is that oil and gas company reserves of some $7 trillion will never be fully realized and represent a "carbon bubble." To burn those assets will destroy the planet, in his opinion. As such, they cannot have the worth that the market currently assigns.


He might be right, but not any time soon.

 

Cheap shares, growth prospects in oil markets

If anything there is a renaissance in the oil market. Reserves are exploding with some discoveries due in part to the very global warming that concerns Gore.

 

It’s a great time to own businesses exposed to the oil markets. Shares are cheap and the prospects of growth are secure for the near term.

 

Here are three names you should consider buying now that Gore has given the all-clear:

 

Atwood Oceanics (ATW)

Despite what Gore claims, demand for oil has been steadily on the climb -- a trend that is sure to continue given the explosion of development by third world countries. Look for oil drilling companies to perform very well long or short term.

 

From a valuation perspective, Atwood Oceanics is quite attractive. Analysts expect profits at the company to grow by 20% next year. That result is virtually guaranteed no matter what Gore says about oil being a bubble. With shares trading for 10 times 2013 estimated earnings, how can you not own this stock? It’s a no-brainer.


Chesapeake Energy (CHK)

In addition to oil, the natural gas market has the potential to explode. Unlike many stocks in the market it has been a choppy five years for Chesapeake, but that will change with Gore’s proclamation of oil being a bubble market.

 

Talk about a cheap stock. Analysts expect Chesapeake to grow profits by 30% in 2014. You can buy that impressive growth for just 17 times 2013 estimated earnings. If the market rallies year, you can bet that Chesapeake will be one of the biggest gainers. Gore’s call has to be the contrarian indicator of the century.


Tesoro (TSO)

Even if Gore is right, some portion of the $7 trillion in carbon assets is going to get burned. Even if only 10% of that amount, that’s still a pretty big number.


Front and center of processing that carbon is the oil refiner. Traditionally refining has been a tough business. The capital and maintenance expenses eat away at margins. Profits are razor-thin and as such, investors have typically shied away from owning the refiners. Oil price volatility doesn’t help either, but now might be a good time to own the oil refiners with prices seemingly stable at the $100 per barrel mark.

 

One of the cheapest refiners to own right now is Tesoro. The company is expected to grow profits by 70% next year. At current prices, shares trade for just 14 times 2013 estimated earnings. I think you can safely profit on this one for a year or two – long before the Gore oil bubble deflates.

 

More from Traders Reserve

 

 

 

 

140Comments
Oct 25, 2013 5:21PM
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who is gore .He drives gasoline cars all the time and all the time he takes planes that use jet fuel made of oil if he doent use a private jet.But he wants us to walk on foot so not to produce too much carbon emission.Some democrats  are like that they say one thing to the people and they do the opposite.For example they hate Billionaires that make their fortune giving jobs to the people.But they want to get richer than god and fast, easy and of course without creating jobs or just a few jobs.Rich is not enough for them
Oct 25, 2013 5:21PM
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Yeah Al Gore Invented the Internet and Help convince a whole bunch of Idiots that Y2K was the end of mankind ! Everyone all ran out and bought brand new computers and what - No planes fell out of the sky ! Then he and Billy Bob couldn't understand why people were not buying computers in 2000 !

 

What a complete Idiot !

Oct 25, 2013 4:13PM
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He is talking about the Carbon / Climate Change bubble --- just the latest in a long line of famous frauds.   Any body want to buy some $1,000 tulip bulbs ?
Oct 25, 2013 6:14PM
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Al Gore ? I thought he was dead ! Here's a guy that talks out of both sides of his mouth . The Indians would call him  " forked tongue " . What happened to your "global warming " prediction Al ? No hurricanes this year to even mention . NOOA kept downgrading their predictions of named storms , and then finally gave up all together . Just had a blizzard in the Dakotas last week , and a cold winter predicted for the whole country .  I wouldn't believe what any politician says , especially this guy .  
Oct 25, 2013 5:19PM
Oct 25, 2013 5:24PM
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I would have a hard time believing anything that Al Gore says, and I thank God he didn't get elected president, even though Bush led us down a merry path of his own. It just adds proof that if a politician (or ex) is talking , he or she s lying.
Oct 25, 2013 7:35PM
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ROFL!!!

 

Al Gore=Biggest Idiot EVER!!!

 

Anyone that listens to that A-Hole deserves to lose all their money.

 

FU Al Gore!

Oct 25, 2013 5:49PM
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So, the premise of this article is that Al Gore (who isn't even a financial expert) says don't buy oil stocks, so it's a good time to buy. That has to be the stupidest thing I've ever read. I'm actually starting to miss Anthony Mirhaydari.
Oct 25, 2013 5:03PM
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Says the guys that said there would be no arctic ice in 2013. MMMkkk... the Arctic ice cap grew by nearly a million square miles from 2012-2013, an increase of 60% year over year.
Oct 25, 2013 4:50PM
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Yeah... this really is crappy investing advice.  Might as well just flip a coin and buy if it's tails.
Oct 25, 2013 8:42PM
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Idiot Gore has motives of his own, having made a fortune on green energy, of course he wants people to exit oil and gas.  
Oct 25, 2013 5:45PM
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predictions are worthless...  everybody has one
Oct 25, 2013 4:01PM
Oct 25, 2013 9:01PM
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Al Gore has as much insight into the future of oil as Homer Simpson. That being said the authors pushing of smaller stocks as a no brainer I'd disagree with especially any doing offshore drilling. It's one thing for a huge company like BP or Exxon to absorb a multi billion loss when catastrophe strikes and something else for a smaller company. Chesapeake and Tesoro are fine as limited to onshore and refining but Atwood's is mostly offshore drilling. That kind of gambling is for the big boys.
Oct 26, 2013 12:14PM
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Why would any intelligent person listen to Al Gore ?
Oct 25, 2013 4:44PM
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What happened to $200 oil in the summer of 2012? I remember an oil expert predicting just that almost 2 years ago. The dude has his own oil newsletter and was on TV on a regular basis. I can't remember his name and I haven't seen him for a while. Oil is in a downward trend at the moment. Back below $100. And with the trucking companies tearing out their diesel engines and replacing them with natural gas engines as fast as they can I would say oil is going down more not up. And chevy and Mazda just announced they will be selling cars powered by natural gas in 6 months. Then you have oil from algae. Soon that will be large scale. And 2 cellulosic ethanol plants have just recently gone into large scale production. Alternatives BABY! And the most overlooked fuel of all is propane. The 3rd. most widely used vehicle fuel. The natural gas companies have so much of it they are pumping it back into the ground! So go ahead and buy oil. I dare ya.
Oct 25, 2013 8:26PM
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I wonder what came first climate scam or his Mansion,Jet or Yacht? But as a zombie brainwashed moron democrat I don't waste much time thinking. Nor do kids who can recycle but not able to add and subtract concern me. Unless that child is a pervert lil boy in a dress. Now back to my democrat bliss of overwhelming debt fraud and lowest labor participation rate since 1978.
Oct 26, 2013 12:05PM
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Anyone that listens to Al Gore, on any subject, is a fool. He is just a conniving thief.
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