I got in CLR back in December to ride the oil bull...looks like it wants to go back to ATH at 70. Here is an article describing the state of affairs with CRL. https://seekingalpha.com/article/4352367-buying-continental-resources
Fair Value, based on NPV of expected earnings for the coming year, is at $17~ according to Morningstar.com " We are reducing our fair value estimate for Continental to $17 per share from $18 after taking a second look at the firm's fourth-quarter financial and operating results. In addition, we have changed the company's moat rating from narrow to none. The ability to generate sustainable excess returns on invested capital is a hallmark of companies with economic moats. Unlike most upstream companies, Continental has a strong record in this area, having consistently earned its cost of capital during the “golden years” of the shale revolution, from 2009 until 2014 (when U.S. oil prices collapsed from above $90/bbl, a level they haven’t since been close to). Lower prices partly explain Continental’s weaker returns since then, though the firm actually has above-average quality assets that sit at the lower end of the global cost curve. We still expect the firm’s low-cost acreage to support sustainable excess returns over the next 10 years. But unfortunately for Continental, the margin of safety is razor thin and no longer sufficient to support a moat. We expect ROICs to exceed WACC by less than 1% in the next 10 years, and that’s only if impairments are ignored. Due to spells of weak commodity prices the firm has written down the value of its oil and gas assets on several occasions, and if these impairments are added back to its invested capital the firm is unable to earn its cost of capital. Moreover, the firm’s exposure to potential ESG issues amplifies the risk and makes the margin of safety more important. "
Thanks for the post...so far the market is proving the Morningstar analysis flawed. Let's see what happens.
USO calls have been about the only position in my portfolio that have consistently been good to me. good luck
My main plays are smaller / mid cap companies highly leveraged to the Oil situation ( BTE, ATH, MEG, ERF, TVE, CJ ) and at times Nat Gas ( BIR, CR, ARX ). Some of them posted strong Q4 earnings already, a couple haven't reported yet. I used to own NVA and ESI but missed the run up on NVA and ESI is still losing money.
https://www.stockcharts.com/freecha...SO,UCO,MRO,OXY,APA,ATH,MEG,ERF,TVE,CR,ESI|B|0 https://www.stockcharts.com/freecharts/candleglance.html?BTE.to,CJ.to,BIR.to,ARX.to,NVA.TO|B|0