Oil stocks are booming like it's the early 1980s
They are becoming the hot shares to own as the quarter winds down, for both trading and investing. A couple of drillers are particularly solid.
I have not seen this kind of sustained move in oil stocks since the early 1980s, when there were oil takeovers pretty much every week.
Some of it is certainly about the price of crude, which has been up huge because of Iraq. But a lot of it is the organic growth that these companies are exhibiting, much of it accelerating as they begin to drill more holes in tighter spaces.
Even after these runs, I am still attracted to Anadarko (APC), Apache (APA), EOG (EOG), Pioneer (PXD), Cimarex (XEC), Continental (CLR), Noble Energy (NBL) and Carrizo (CRZO), because I think, in every case, numbers are too low. I still like Occidental (OXY) for its upcoming restructuring and Marathon Oil (MRO) for its takeout value.
The major oil services stocks all still have the possibility of further appreciation, but I am drawn to the drillers, notably Ensco (ESV) and the boutique specialty plays Basic Energy (BAS) and, at these prices, Core Labs (CLB).
These are becoming the stocks to own into the end of the quarter. I like them both for trades and investments.
Jim Cramer's Action Alerts Plus: Check out this charitable trust portfolio for the stocks Cramer thinks could be winners. The portfolio is long ESV, MRO and APC.
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OIL FOR THE PARKING LOT TO PUT IT
OIL FOR MY PLASTIC STUFF
OIL TO MANUFACTURE MY SOLAR PANELS
OIL TO MANUFACTURE THE WIND TURBINES
OIL TO MANUFACTURE LITHIUM BATTERIES
OIL TO MANUFACTURE MY SMARTPHONE
OIL TO BUILD THE CAFE FOR ME TO CHAT WITH FRIENDS ABOUT GOING GREEN
----- WAIT ----- OIL IS KING !
I supect Jim wrote this opinion while standing in line at the donut shop. I have good days and bad as well so I'll give him a pass on this one.
Jim Cramer...? This goof has been selling snake-oil for years.
Goldman was handing out tips to favored clients that one of its analysts was about to publish favorable ratings of a mutual fund, giving those clients the opportunity to buy in six days before the analyst's rating was published.
This is a practice that's apparently been going on forever. You give an investment bank enough business, they will throw bon mots like this your way. CNBC's yipping rumor-poodle who is formerly of Goldman and then of course a hedge fund manager in his own right, describing how his wife and partner Karen Backfisch taught him to butter up investment banks with commissions:
How she did it was by gaming Wall Street, trying to anticipate moves of analysts before they were made, and placing big bets on the direction that analysts were going to go. That way, she said, you always had an edge, you never owned anything idly, and you always had an exit strategy
Karen explained to me that the analyst game was a game of sponsorship. Analysts like to get behind stocks and bull them. You have to get in on the ground floor when they start their sponsorship campaign. If Merrill is the sponsor of a stock, it could be good for 5 points. If Goldman sponsored something, it could be good for 10. You want to buy something and flip it-sell it immediately-into the sponsorship. That's the only sure thing on Wall Street.
When I asked her how we could find out about all of these wonderful things when I was jut a little hedge fund manager, she said one word: 'commish.' Commissions, she explained, determined what you are told, what you will know, and how much you can find out. If you do a massive amount of commission business, analysts will return your calls, brokers will work for you, and you will get plenty of ideas to make money, on both a short- and long-term basis Commissions greased everything.
This comes on the same day that the New York Times , the guy who stole Goldman's high-frequency trading program.The story is about the use of technology that banks use to make trades in fractions of milliseconds, taking advantage of tiny price discrepancies in the market.
Both of these stories have a common theme. The people who are actively innovating on Wall Street are all involved in the business of gaming the system to take advantage of short-term price swings. The people who invest money for the long-term and stick with their investments are punished in this environment.
Jimmy Cramer, the market shill,
like all cornucopians, says Drill baby! Drill!
We not out or cheap oil, there's plenty
to be found!
Just need millions and millions of holes in the ground!
But the wells soon deplete, Jimmy, until there's barely an ooze.
Still Jimmy Cramer says, these stocks cannot lose!
Well OK, Jimmy, plenty of oil, that maybe true,
But the days of CHEAP oil are most certainly through
For eternal growth, dear Jimmy, cheap, cheap oil must flow
Hate to break it to you, pal, but the answer there is no.
But, believe the market hype and industry lies
When it all sh**s the bed, Jimmy, we won't be suprised
In matters of energy, you just haven't a clue
Rest assured there, Jimmy, we already knew
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US markets were able to rally hard and largely trim the day's losses. Meanwhile, a bounce in crude oil could be in the offing.
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