Energy ETFs - Bakkan, shale, fracking or otherwise?

Junkster

Being a momentum trader I have moved from the small to mid cap biotechs to energy. I had previously mentioned being in KOG and have since put on a new position in TPLM. HAL has done well for me too albeit it is not exactly a pure play on shale/Bakkan ala OAS, CLR, SN, or even EOG. Plus who knows what will happen when their earnings are announced Monday. Sometimes not a fun time to be in a stock. Energy ETFs are on a roll such as IEO and XOP and they do have shale exposure. If anyone knows of a more pure shale play ETF I am all ears.

Ted

Dear Junkster: How About FRAK & individual stock Sea Drill. I like the energy sector for the remainder of the year along with healthcare and financials.
Regards,
Ted
http://www.vaneck.com/market-vectors/equity-etfs/frak/snapshot/?utm_source=google&utm_medium=cpc&utm_campaign=frak&keyword=marcellus +shale +etf
Sea Drill:
http://finance.yahoo.com/q;_ylt=AiWJx130y37sNg5_CR4EghBvNu8C;_ylu=X3oDMTEycjBlOWNmBHBvcwM2MARzZWMDeWZpUXVvdGVzVGFibGUEc2xrA3Nkcmw-?s=SDRL

Junkster

Reply to @Ted: Many thanks Ted, FRAK was what I was looking for as I thought there was a more pure play ETF. After checking it out I think I will just stay with individual equities in that arena. I am not much of an ETF guy anyway and FRAK is not real liquid and I didn't like their holdings. I agree 100% with you on energy and healthcare. I don't know enough about financials as they are too plodding for my radar screen but don't doubt you will be spot on there too.

scott

I'd also consider browsing around Canada. There are some Canadian energy companies (Gibson, Imperial, Black Diamond Group, Crescent Point, others) that have Canadian & some degree of US Exposure, as well as nice divs in many cases. The only issue with some of the Canadian companies is illiquid trading on US pinks. The Canadian market has not done as well this year, so chances are you're not going to be finding things at 52 wk highs.

FRAK does have some Canadian plays - again, I think people aren't looking at Canadian energy co's despite some solid companies.

I agree with Ted on SDRL.

The other thing I'd suggest is looking into environmentally-related plays on unconventional oil. I just think there's going to be more regulation and anything that has to do with waste removal/water treatment/etc etc is worth consideration. Ecolab (ECL) is kind of a play on this, among a hundred other things (one of the larger holdings of the Bill Gates Foundation) - everything from water to energy to bed bugs.

http://www.ecolab.com/our-story/our-company/our-vision/abundant-energy/our-energy-expertise

I really think any sort of clean-up/waste company involved is something to consider as I just totally see more regulation around this whole industry down the road.

The rails, too - bringing sand and other materials and shipping oil, although some rails have more exposure to oil than others. Rails upgrading for more frack sand: http://news.wpr.org/post/railroads-upgrading-tracks-carry-more-frac-sand

From early this year, but good article re: rail and fracking http://business.financialpost.com/2013/03/02/crude-via-rail-not-a-fleeting-business/?__lsa=2ad8-bd9b

"FirstEnergy Capital expects CN to move 100,000 barrels of crude oil per day by rail in 2013, plus fracking sand and drill pipe."

Rails may lose some of this if more pipelines are built but I'm questioning whether pipelines are not going to run into more and more resistance (see Keystone XL)

Hi-crush (HCLP) is a frack sand MLP (it does result in a K-1) that has done very well. Limited focus, certainly, but doing well and nice yield.

It hasn't done well this year, but Northern Tier Energy (NTI) is a refinery with exposure to oil from the Bakken (http://www.bloomberg.com/news/2013-05-14/bakken-gains-as-minnesota-refinery-starts-crude-units-after-work.html, http://www.istockanalyst.com/finance/story/6044815/northern-tier-nti-a-refiner-wrapped-in-mlp-structure) and while it will pay an inconsistent dividend, it has so far been paying a double-digit yield. It is an MLP as well.

GE has some exposure (http://www.bloomberg.com/news/2013-04-03/ge-pushes-fracking-research-with-lab-in-bet-on-shale-gas.html) "Oil and gas is GE’s fastest-growing segment, with revenue up 57 percent to $15.2 billion since 2009, and Chief Executive Officer Jeffrey Immelt is betting that other divisions can profit as drillers tap more shale formations. The center will join labs from Shanghai to Rio de Janeiro and be the only one focused on a single GE business, Little said."

GE also has railcar leasing, as does GATX (GMT)

Junkster

Thanks Scott. I trade only stocks in tight rising channels (like yours and mine fave ABC) In energy/shale, Bakkan sector that would be EOG, KOG, TPLM, SN, LNG, CRZO, CLR, OAS, to name just a few. But besides being in a tight rising channel they must also past a fundamental filter. Then if I buy them they must not be overbought short term. Recently the overbought filter kept me out of many but got me in KOG (now overbought) and TPLM. I also hold HAL but fear I could get my head handed to me Monday on their earnings. The risk with tight rising channels is when they fall out of them it can sometimes be hard and fast. ECL is definitely a tight rising channel stock but doesn't meet my fundamental filter. HCLP looks good both ways albeit a bit overbought short term. So thanks for that one as I will keep it on my watch list. SDRL doesn't meet my criteria for a tight rising channel. Another play in fracking but way overbought is SLCA.