It’s Like Having
Your Own Oil Well!

Get In on the Ground Floor
of One of the Largest Energy Booms in History!

 

Dear Investor,

One of the biggest trends of the decade ahead—perhaps of the century—will be the boom in global energy usage, combined with the boom in energy prices.

The Chinese are adopting western lifestyles as fast as possible, buying 18.5 million vehicles last year … 5.8 million more than U.S. buyers.

Oil prices are on a steady uptrend, driven by both growing demand for fuel and dwindling supply … thanks in part to Middle East politics.

As a result, energy stocks are going through the roof!

It’s a recipe for riches … but only if you know where to invest, and when.

Luckily for you, that’s my job. As editor of Cabot Global Energy Investor, I tell subscribers just like you exactly what stocks to buy. Equally important, I tell them when to take profits!

For example:

Amtech Systems (ASYS), a solar and semiconductor innovator, handed us a 79% profit in five months—and a 59% profit in only three months!

Polypore (PPO), a maker of membranes for lithium-ion batteries, soared 237% in 13 months in 2010 and 2011

Cree Inc. (CREE), a creator of high-tech solutions for energy and power applications, jumped 31% in 2010.

But that’s history, so let me tell you what I’m doing for my subscribers now.

I clued them in to Kodiak Oil & Gas (KOG), a Colorado explorer and producer back in November, when it was selling for under 8 dollars a share. Three months later, it was up 40%.

I recommended Westport Innovations (WPRT), the company whose natural gas-burning engines are in great demand by truck and automakers worldwide, in October when it was trading at 31. My subscribers are now looking at gains of 40% … and holding tight.

Finally, I alerted them to that rarest of birds, a high-yielding stock with great growth potential. The company is Seadrill Limited (SDRL). It’s the largest offshore drilling company in the world, Its quarterly dividend payment results in an unusually high annual yield of 8.5%, which has grown at a compound annual rate of 36% since 2008. The stock climbed 15% in the weeks after my recommendation, and I’m still recommending it.

And now I want to help you get profits like this too.

Who am I?

I’m Lou Gagliardi, the editor of Cabot Global Energy Investor. With over 20 years’ industry experience in the oil patch, I guide my subscribers to opportunities in every corner of the industry: from small regional oil and gas explorers to foreign national oil companies, from deepwater drillers to developers of Canadian oil sands, from pipeline goliaths to young companies in fast-growing alternative energy fields.

My investing methodology rests solidly on bottom-up fundamental analysis of all relevant companies in every energy sector, enhanced by growth and momentum indicators.

Superimposed on this fundamental analysis is a macro global view. In a nutshell, energy is a global commodity business, so understanding the pressures applied to these stocks by tertiary forces like currency traders and government regulations helps you get a better return on your investment.

At the end of the day, successful investing in energy relies on getting the commodity right, getting the company right and lastly, getting the global macro picture right.

Never has that core tenet been as important in energy as today. Thanks to heightened global economic uncertainty, accentuated market action and major commodity price trends, I see numerous profitable investing opportunities over the long-term horizon for energy investors.

Welcome to the Era of Expensive Energy.

Indeed, the prospects for long-term profits in energy stocks are best captured by understanding three structural long-term trends that I do not see abating:

1. Constrained Global Resource Supply

2. Emerging Markets Growth

3. Global Inflationary Pressures

All three factors are bullish long-term catalysts for higher crude prices, but constrained global resource supply is by far the most powerful of these tailwinds driving oil prices higher.

When global oil production began to fall below 95% of global consumption, crude prices (West Texas Intermediate (WTI) in this chart) rose dramatically (except in 2009). In the future, I don’t see this scenario abating; rather, I see it intensifying.

Add to this the pressures of growing demand from emerging markets … the Chinese all want to gas up their new cars!

Since the mid-1990s, emerging markets have driven global GDP growth.

Then add the inflationary pressures caused by global monetary expansion and global growth.

A dangerous mixture—excessive monetary stimulus and exploding global GDP growth—rocketed crude prices higher from 2000 onward.

The result is a perfect storm that is bound to push energy prices—and energy stock prices—higher.

In fact, to meet increasing global crude demand, it is estimated that additional incremental world production to replace current depleting worldwide production will need to be roughly 38 million barrels a day by 2020. That’s roughly 43% of current worldwide crude oil production!

Where do you think this oil (or its equivalent) will come from?!

For the most part, the oil will come from new drilling, and new technologies that squeeze more oil out of current wells. And alternatives to oil will come from drilling (for natural gas) as well as from new technologies like fracking, and the development of renewable energies like solar and wind power.

And who do you think will pay for it?

Consumers, of course, which will send the profits of the companies that produce this energy through the roof!

My job is to find the companies with the greatest prospects for growth, to explain to you why they have such great prospects, and then to get you to invest in these companies at the most opportune times.

Here’s how I do that.

Like most analysts, I visit companies and talk with management. But unlike most analysts I don’t simply accept management’s rosy visions of the future; instead I say, “Show me the numbers.”

Because numbers can’t lie.

So I keep tabs on the metrics of all investment candidates in all energy sectors to find companies with these qualities. Think of them as links along the oil and gas value chain of Resources to Production to Cash Flow to Value.

1. Companies that are low-cost producers. It’s a no-brainer that if their costs are lower, their profits should be higher.

2. Companies with deep resources that can be developed into future production. I like stocks with deep undeveloped “inventory.”

3. Companies with high growth prospects that promise accelerated cash flow. The market loves companies with “unexpected” bursts of revenues and earnings growth.

4. Companies with strong balance sheets with low debt expense. I like to see a big cash cushion, telling me the company can ride through commodity cycles.

5. Companies with high net cash flow. I know these companies are most likely to grow by acquisition.

6. Companies that trade at a discount to their net asset value. This tells me that even if growth isn’t as fast or as smooth as expected, the stock still has upside potential. At the same time, this tells me that in weak markets, the stock is likely to fall less.

I’ve refined my approach to company and stock selection over more than two decades as an industry analyst. I’ve been through all the cycles, and I know in the long run, my metrics-centered approach works.

But I don’t want you to forget about the major forces—far outside my control and your control—that are right now changing this industry in unprecedented ways.

In short, a confluence of energy crises is bearing down on the world like an unstoppable force.

Consider these daunting facts:

China has surpassed the U.S. as the world’s largest energy user, transitioning from an exporter of oil to an importer. China's energy demands are expected to soar 75% by 2025, accounting for a third of global consumption growth.

India faces booming demand, as the 70 million households not yet connected to the grid begin to enjoy the conveniences enabled by electricity and as the 90% of households without cars rapidly trade up from their bicycles and scooters.

The U.S. Energy Information Administration expects global oil demand to increase by a mind-boggling 900,000 barrels per day in 2012.

The International Energy Agency estimates a minimum of $20 trillion—that's right, trillion—must be invested over the next 25 years to meet burgeoning energy demand and to offset declining reserves of the world's oil fields.

And if the people of China, India and the rest of the world want a standard of living that's on a par with that of the United States, energy demand will quadruple!

Is it any wonder that the price of gasoline in the U.S. is now nearing $4 gallon?

The fact is, energy isn't just about automobiles and utilities. Any economy needs a certain level of energy just to keep its infrastructure—roads, bridges, schools, agriculture, medical system, etc.—repaired and working. As energy demand outstrips supply, the very foundations of our prosperity will be threatened.

If you do nothing, the biggest effect on you will be the higher prices you’ll have to pay at the pump, and to heat your house, and to fly on an airplane … and to do all the other things in life that require energy; even food will be more expensive.

But if you do something—specifically, if you invest in the stocks I recommend—you can actually benefit from this megatrend, and then thank energy stocks for helping you survive—even thrive— through these world-shattering changes.

But you need to start investing in energy stocks now, while prices are still reasonable. And you need to subscribe to Cabot Global Energy Investor, a key member of the Cabot family of investment advisories, so you’ll have a reliable guide to the most profitable stocks.

When it comes to energy-related investments, we get results. For example, everyone knows that 2011 was a very challenging year for investors, featuring volatility that kept even the nimblest traders off balance and eventually scared most investors to the sidelines … they withdrew $84.7 billion from mutual funds in 2011!

But while most investors were losing ground, my subscribers achieved market-beating returns that year, with profitable picks like these:

Mastec (MZT), an energy infrastructure construction company, soared 64% in the months after we recommended it.

PMFG (PMFG), previously known as Peerless, slowly and steadily charged ahead 20% after our recommendation.

Brigham Exploration (BEXP), an independent developer of oil and gas properties, brought subscribers a quick 29% profit in four months when it was acquired by Norway’s Statoil in October.

As oil prices climb over $100 a barrel, energy is back in the public consciousness—in a big way. Indeed, energy these days is a higher political and economic priority than at any time since the oil shocks of the 1970s.

But I see this development as one of the great buying opportunities of a lifetime, as the energy sector resumes an upward trajectory that was interrupted by the now-ended recession.

Coal isn’t the solution.

Coal has long been considered a reliable, abundant and relatively cheap source of energy. No longer. Low stockpiles, strict environmental regulations, misguided energy policies, and Asia's voracious appetite are driving international spot prices of coal to stratospheric levels, rivaling the spike in oil prices.

Nuclear isn’t the solution.

China alone accounts for 40% of planned new reactors, with 12 nuclear power plants in operation, 25 under construction and 50 more planned. As a result, demand for uranium has outstripped supply every year since 1989, pushing up uranium prices by as much as 20% in the last year.

To me, these problems spell opportunity … because I know that when demand rises for a product or service—in this case energy—the market finds a way to provide.

I also know something else: Early investors in the stocks of the best energy providers will get rich.

So who do you want to be? The guy who complains about the price of filling his gas tank, or one of …

The New Rockefellers

Imagine having had the opportunity to invest in John D. Rockefeller's Standard Oil at the start of the last century, and you’ll get the picture. Brave people who invested wisely in energy back then went on to make phenomenal profits—and become some of the most powerful and influential individuals in America.

Hidden among the scores of companies getting their start right now will be the most powerful corporations of the 21st century … and this is your opportunity to get in on the ground floor.

Act now to take advantage of this extraordinary profit opportunity.

In each weekly issue of Cabot Global Energy Investor, you’ll receive:

An overview of the market. Every Thursday, I'll give you an informative overview of the energy marketplace. You’ll come away with an awareness of the major trends and outlook for energy investing—and of the specific industries and stocks recommended by Cabot Global Energy Investor.

Details on my featured stock. Every week I'll highlight one or more of the stocks with the best growth potential, providing an in-depth description of its products, properties or services, along with a look into its fundamentals. Most of these stocks are chosen for their long-term potential, and I’ll give you specific advice on the best times to get on board.

Each issue will also keep you up to speed on every stock in the Cabot Global Energy Investor portfolio and Watch List.

But there’s more!

You’ll also get:

Special Bulletins. When the market—or any of my recommended stocks—is especially active, I’ll email you right away with the news and the actions you need to take to make the most of your investment.

VIP access to our subscriber-only website. You’ll be privy to special reports, past issues and more.

Handholding—at no extra charge! Along with your subscription to Cabot Global Energy Investor, you’ll be entrusted with my very own email address—a direct connection with me. Got a burning question or an insight you’d like to share? Go ahead—I'll be quick to provide you with a personal answer.

An Ironclad Promise …

I understand that you might have reservations. That's why I’ll make you an ironclad promise that would bankrupt me if my subscribers actually didn’t make money from my recommendations.

Cabot Global Energy Investor is backed by a 100% satisfaction money-back guarantee. If, for any reason, you’re not completely satisfied, you can cancel within the first 60 days of your trial period and receive a full and complete refund of your subscription fee—no questions asked. And you get to keep the past issues, as our way of saying thanks for giving our service a fair try.

Remember …

You’ll use our time-tested stock picking and market timing system, which has been making money for Cabot subscribers for 41 years and counting.

You'll get my expert guidance and you'll have private access to my insight and advice—this alone is worth more than the price of a subscription!

The bottom line: subscribing to the Cabot Global Energy Investor could be the most lucrative decision you make this year. And the best time to start is right now, before the markets take off again!

Sincerely,

Lou Gagliardi,
Editor
Cabot Global Energy Investor

P.S. For more than 41 years now, we’ve staked our reputation on every single recommendation we’ve made. That’s why if you’re not 100% satisfied with Cabot Global Energy Investor—for any reason—you can cancel within the first 60 days of your subscription period and receive a full and complete refund of your subscription fee—no questions asked. If you decide to cancel after 60 days, a refund will be issued for all undelivered issues.