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Welcome to Profit Confidential • Monday, May 21, 2012

Why I’m Riding the Energy Bull

Wednesday, September 28th, 2005
By Mitchell Clark, B.Comm. for Profit Confidential

And so, the bull market continues — in energy that is. Although the broader market hasn’t done much over the last quarter, I give credit to the strength of this market for holding up so well given all the calamities we’ve experienced of late.

As I scour the stock market for investment opportunities, I continue to find great companies in the energy/commodity sector. This is somewhat worrisome, however, because you don’t want an equity portfolio to be overloaded with stocks representing only one industry group. That being said, commodity/resource companies seem to be the only businesses out there that boast excellent fundamentals for the rest of this decade.

Another two companies stand out in this market right now. Both large-caps are experiencing significant business success by satisfying the demands of the current raw material revolution. Joy Global, Inc. (NASDAQ/JOYG) is a company that’s doing great operationally and on the stock market. This interesting company manufactures and sells mining equipment for the extraction of metals and ores. It is a leader in providing mining equipment for the coal industry, which is another commodity- related market sector experiencing significant demand. Joy Global offers a track record of success, a solid product line, and excellent industry fundamentals, going forward.

Another company that I recently came across that looks interesting is ENSCO International Incorporated (NYSE/ESV). This large-cap company provides offshore drilling equipment to oil and gas companies on a global basis. If you didn’t know, drilling rates are soaring around the world, as oil and gas prices stay strong.

ENSCO has been in business since the mid-`70s, and Wall Street expects its earnings to double in fiscal 2005… and double again in fiscal 2006. All things being equal, these are some very impressive expectations.

As Jim Cramer says all the time on his outstanding CNBC show, “Mad Money,” there is always a bull market going on somewhere. We know that energy is everything in today’s marketplace, and it looks like the party is going to last for quite a while.

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Profit Confidential AuthorMitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.

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