Help with portfolio

[Dividend Watcher]

(01-08-2015, 05:15 AM)booze007 Wrote: i have 10000 to invest and want to cash in on the cheap oil , please put forward your suggestions

Welcome to the forum, Kumar.

What I bolded above has me a little concerned. The mindset that you're going to "cash in" on whatever is the either 'hot market' or one that's going through recent turmoil such as the oil patch is not conducive to building a strong, long-term portfolio. For the last couple years it was biotech, last year utilities vastly outperformed even though it wasn't talked about much. Sure, you can reap some good rewards for the short-term but can you do that consistently? I know I can't do that and don't even try.

Right now, the changes in the oil field for the most part have not even shown up in financial statements. Most of the action has been corporate announcements or actions "on the ground". The entire world's economy is based on carbon in one way or another adding a layer of complexity. These things, to me, seem to take longer to play out and I'm not sure the effects can be quantified generically for every company.

What happens if Saudi Arabia & Kuwait decide to increase production to support their own obligations regardless of the OPEC quotas? Cheap oil really isn't going to hurt them much with their extraction costs being so low. Likewise Venezuela & Argentina flooding the market just in an attempt to forestall another round of social unrest? Venezuela just seized all of HP's land rigs last year and HP is now in a protracted battle to get reimbursed. That will probably end up taking years to get settled. Look at CVX's ongoing battles with Ecuador.

My gut feeling is that we have a year or two before the whole picture plays out and the supply/demand factors again are the major factor in determining corporate pricing power, hence profits, and stock prices. Afterall, I haven't seen any credible reports that the world is awash in petroleum products. Any glut seems to appear at the margins and that can be eaten up pretty quickly. Just yesterday I heard a report that auto manufacturers can't keep up with the increased demand for trucks and SUVs again.

So, all that being said, I'd recommend with staying with the majors and conservatively financed E&P companies rather than speculating. CVX, XOM, COP, OXY (which has similar specs to CVX except the dividend streak) would be be my first picks. Then BP, TOT, RDS.B. For E&P and suppliers HP stands out with hardly any debt and some pretty powerful intellectual property in their FlexRigs. There's SLB, HAL and NOV with NOV being the baby of the bunch but an interesting niche. Later in the cycle, when pricing & supply get sorted out, I'd look at the deepwater companies and see how they fared. I still like ESV due to their conservative debt levels and they're safety and customer service records but wouldn't put money in here yet.

(01-11-2015, 01:32 PM)booze007 Wrote: ... from the posted comments i got a brief idea how to screen dividend stocks .

for example
CRRC Courier Corporation

according to daat99 list

1.dividend payed years 24
2 i am not sure how to find out this ? eps next 5 years is at 36 percent
3.debt/eqty 0.23
4.good increase
5. its really small company , i am not sure about the rule, in selecting over 2 bln companies .
if a small company has a good track record with dividends and healthy finance . why not ?
well most of the companies i found were way below 2bln .
is not safe?
6.PE =18.88

please put forward your thoughts ,

I did a quick look. CRRC is NOT on the CCC list (big deal, I know, but they can't even make the Challengers list?) and their market cap is around $150M, they've been in the book publishing business for almost 200 years, a lot of the stats look OK except trailing P/E is over 21 (for a book publisher???) and the payout ratio is 124%(!). Doesn't look good for the dividend. Lastly, the top 3 officers' pay is almost 3% of their market cap. I didn't dig much further but it looks like a small cap that's run for the benefit of the employees and especially senior management.

(01-11-2015, 01:32 PM)booze007 Wrote: evep had similar figures during the 2008 oil crash ,but still managed to pay the dividends.history doesn't count here?

EVEP is a limited partnership with EV Energy GP being the general partner. EVEP was founded in 2006 so there isn't that much history here. They do have some proven reserves although I didn't dig much deeper (pun unintended) to find out if it's tight oil or free oil. I would dig deeper into their financials for the last 8 years to find out all the details. Just because they paid a dividend in 2008 doesn't tell you where the money came from to pay those dividends. It may be a good company but I have no interest to do more research.

It would be nice of you to introduce yourself in the Introductions section. I have no idea of your age, your goals, nor whether you have substantial assets outside of your seemingly speculative portfolio (you mentioned trading forex also). For that, I'm hesitant to give you a rah, rah cheer. Sorry to be the Debbie Downer of the bunch. I get a little nervous when everyone starts chiming in on making a quick kill in something. Perhaps someday my tulip bulbs will bring me great wealth.

I wish you luck but recommend you tread gently into whatever you decide.