Sprott Managment – Oil Junior Picks

English: This map shows the extent of the oil ...

English: This map shows the extent of the oil sands in Alberta, Canada. The three oil sand deposits are known as the Athabasca Oil Sands, the Cold Lake Oil Sands, and the Peace River Oil Sands. (Photo credit: Wikipedia)

 

July 18

LEGAGY OIL & GAS (T-LEG) $5.82 +0.42

PAINTED PONY (V-PPY) $7.96 -0.03

WHITECAP RES. (T-WCP) $6.62 +0.38

ATHABASCA OIL (T-ATH) $12.05 +0.02

Eric Nuttall ( Sprott ) interviewed on Canadian TV Monday July 16  – I guess you wouldn’t be too surprised to hear him say that some of the more junior oil and gas stocks are “absolutely, jaw-dropping cheap.”

There has been a crash of some significance over the last five months on all resource stocks, but if you have been in the oil and gas sector, you have been hit hard as well.

 

Look at the return on two of his top picks from his visit last August.

juniors have lost almost half one’s money. Surprise, surprise…

Tthere has been a lot of that in the oil and gas sector, with many of the more juniors having a three or four-for-one

sale.

 

 Nuttall has these three top picks going forward.

 

Legacy Oil and Gas (again…and yes it has debt folks);

 

 

Whitecap Resources and

Athabasca Oil

for those that like charting and has some relatively intriguing news expected in the coming while.

 

We thought we would look at these three years charts on Nuttall’s three picks (next page) and apply the

 

 

 

The Schacter idea like it has in the past…buy the oil stocks in October-ish as Schachter says and sell in February. Once again, that statistical  anomaly seems to work again (the suggestion is that you go from the weak season for oil demand in the fall, to the heavy oil use season in the winter and that’s usually a million and a half barrels of extra demand).

Very large sums lost in the resource sector over the last while, hopefully this October/February, Schachter thing, might be worth trying in the fall to get some of that lost money back.

 

Meanwhile, Nuttall suggests the gassy stocks might be a bit ahead of themselves and the oily stocks he suggests are cheap.

One thing of course that could throw these plans into a dust bin is the continuing deterioration of world economies. Suddenly China is only growing by 7 1/2% (hey folks, 7 1/2% – there is nothing wrong with that). India is slowing to 6% and so forth. The big problem of course is the United States and Europe. If the U.S. goes into recession and Europe goes into something worse than that, well, that “Shack Attack” might not work.

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