Good Time To Buy XTO?

Discussion in 'Stock Market' started by Duke505, Jan 26, 2009.

  1. Duke505
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    Duke505 Member

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    I have been watching XTO stock for a while now. It looks like at one time they were up in the $70 per share range and now you can buy at $36. Do you think this is a credible company and is it a good time to buy their stock??
     
    Last edited: Jan 26, 2009
  2. Paulie
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    Paulie Platinum Member

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    I like them. Good balance sheet, and good upside potential considering we're going to be seeing inflation in energy again sometime soon. They hit the 70 range in July when oil was high. Oil will be high again.

    Buy USO and XTO, DGP (double long gold), short the Dollar, and see a nice profit, in my opinion.
     
  3. Gord
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    Gord Active Member

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    Where is this demand for oil and natural gas going to come from? I see energy companies scaling back big time. They certainly don't seem to be planning on energy prices going up any time soon.
     
  4. Duke505
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    Duke505 Member

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    Usually you see a high in natural gas this time of year due to the cold. I think its been a mild winter so far. I do believe there will always be a demand for natural gas. That is until it's all gone!!
     
  5. Gord
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    Gord Active Member

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    Huh? Haven't you been paying attention to the news? It's been the coldest year in a decade. It is industrial demand that is down.
     
  6. Duke505
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    Duke505 Member

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    You are correct for the Northern portion of the US. The Southern portion is way above average on temps.
     
  7. Gord
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    Gord Active Member

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    I didn't mean just America, but the whole world. Take a look at the nat gas futures. They've fallen from a high of $13.70 to around $4.50 in 13 months. Contract volume has fallen 30% - that is tremendous demand fall off. We're at the tipping point of winter so consumer demand will soon begin to fall. I don't trade long term (I only daytrade), but I don't see nat gas going higher any time soon. But if you think its at a bottom, well hey, go long, and good luck to you...
     
    Last edited: Jan 26, 2009
  8. Paulie
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    Paulie Platinum Member

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    Gord you're not taking inflation into consideration. The monetary base is at an unprecedented level right now, and that means that concerns for inflation are high, as they SHOULD be in this case. The consequences for the money supply are freightening to say the least.

    We're most likely going to be seeing some really bad inflation when the banks start loosening up and lending again. The dollar will lose value, and commodities will go up. Energy will be high again. We'll be seeing $100 oil again, maybe by the end of the year, but definitely next year.
     
  9. Gord
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    Gord Active Member

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    Then shorting the dollar seems the more sure bet to me. Inflation will not increase demand for nat gas, but probably reduce it more. There may be a saw off with a lower dollar, but how will that significantly increase the price of nat gas? I heard on the radio the other day there are tankers full of nat gas and oil sitting idol waiting for buyers.
     
  10. Gord
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    Gord Active Member

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    And one more thing. Inflation is no sure bet. Many economists are fretting about deflation which would be much worse, creating a spiraling down of consumer demand.
     

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