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Superior Energy: Profit from the rise in prices at the gas pump |
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| Jun 20, 2008 03:58 PM UTC |
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Tracked Blogger
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Via BloggingStocks:
Filed under: Stocks to Buy It doesn't take a Harvard mathematician or a Wall Street investment banker to realize we're in the era of high energy prices.One way to compensate for the increased energy cost: consider an investment in an oil/oil services company whose fortunes are directly linked to the world's most vital commodity -- oil. With this in mind, Superior Energy is worth a review. Superior Energy Services (NYSE: SPN) provides specialized oil field services to oil and gas companies operating in the Gulf of Mexico and on the Gulf Coast. The company also sells and rents oil/gas well drill equipment and tools on four continents. In general, analysts like SPN's rental tools and intervention services businesses, and the fact that SPN's services help oil/gas companies maintain production during seasonal down periods, which anesthetizes SPN somewhat from commodity price volatility. Further, international expansion opportunities are promising: analysts say additional SPN expansion abroad will lessen the earnings impact of a downturn in key Gulf of Mexico operations. The Reuters F2008/F2009 EPS consensus estimates for SPN are $4.09/$4.84. The risks? Reduced demand for SPN's production-oriented services and/or a large, sustained decline in energy prices, particularly oil, would hurt SPN's results. Don't look for the latter anytime soon. The First Call mean rating for SPN is: Buy. [5 firms.] Mean 2008 target: $60. [high: $66, low: $56.] Stock Analysis: Superior Energy Services is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from SPN's shares. Sell/ Stop Loss if you were to purchase shares in this company: $38. Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit. Permalink | Email this | Comments <map name="google_ad_map_145-1232091"><area href="http://imageads.googleadservices.com/pagead/imgclick/145-1232091?pos=0" shape="rect" coords="1,2,367,28" /><area href="http://services.google.com/feedback/abg" shape="rect" coords="384,10,453,23" /></map> 
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