What To Do Next?

We've benefited from a fairly strong oil market, resulting in an energy subsector that has been outperforming the stock indexes for the past several weeks. In short, our energy thesis has made us a lot of money so far - and it's probably a good time to drill down on where we are in specific stock picks I have made and whether this is the time to buy more, take profits or just hold on. I'll run through some of the big ones I've harped on and the recommended buy levels and current prices.

I'll also make clear which ones I personally own and which I don't - which shouldn't make any difference in strategy for you, but readers always seem to want to know.

EOG Resources (EOG) - One of my big personal stakes, this one has been recommended and bought basically all the way down under $65 and I own with a basis price under $72 a share.

I've talked endlessly about their "premium" well strategy and how that strengthens them for the long haul, their superior acreage and balance sheet control. There are sexier operators out there, like Pioneer Natural Resources (PXD), but none better. The chart is also clean as a whistle - this one is a hold for a very long time to come for me, and I wouldn't hesitate to buy more if shares slipped again towards $78 - but I'd be surprised to see it.

Hess (HES) - This one remains a trading vehicle, one that I currently don't own. I've recommended shares near $50, which has proven a great place to get in.

After some bumps in the road, the chart now looks a bit constipated, unable to get out of its own way. If I were guessing on a next direction, it would certainly be up, but I'm uninspired by the action - I'm on the sidelines for a reason here, although shares made a terrifically strong move up on Thursday. If you're holding it, I see no reason to leave the bus right now.

Devon (DVN) - Another trading vehicle, I recommended at $35 based on the promised quick sale of assets and opted for them over Pioneer Natural Resources, which has subsequently underperformed.

The chart looks like it's either going to trade back down from its current range of $33-40, or breakout above $40. You know what I think is more likely, but I've already taken the quick 10 % profit on this trade and gone back to waiting. If you're holding this one, you have my blessings either way.

Anadarko Petroleum (APC) - I love this stock, mostly because everyone else hates it. It's always insanely undervalued relative to peers, and sometimes that's for good reason, but mostly it's for bad ones. I recommended and hold APC near $47.

Anadarko has finally broken above it's 200-day MA, while maintaining above it's 20-day for more than a month - that's some strength that's been lacking in this one for a while and its STILL way undervalued, in my opinion. I hold it, and wouldn't mind buying more on any small pull back.

Cheniere Energy (LNG) - Another recent recommendation and buy of mine, I waited a long time to get back into this one. It is the clear leader in future LNG export opportunities, like Tesla (TSLA) is the clear leader in the future opportunity in electric cars.

The Cheniere chart has been building a base between $32 and $40 a share for about four months now, which implies to me a fairly good move one way or the other with an inevitable breakout. On Thursday, it made the kind of move up that really inspires confidence. I'm definitely accumulating here on dips with a mental stop near $30.

Silver Run Acquisitions (SRAQU) - so far, Mark Papa has announced nothing, so there's only two ways he's likely thinking: Either he believes oil is going to make another run down towards $40, or he's being very careful, maybe too careful in choosing where to spend. There are values out there, as the previous Devon/Pioneer deal showed - you couldn't argue the acreage price paid by Pioneer in the Wolfcamp to Devon, only the strategy of adding more debt (or dilutive shares) right now for them. With the clean cash slate of Silver Run, a deal like this makes a lot more sense. I'll give Papa another few months to make a move, but if it looks like he's banking on oil making another dive, I'll bail on this one - basically because I think he's wrong, and will inevitably miss the opportunity that's currently here.