This is a risky recommendation because of potential legal and other liabilities from the Gulf of Mexico disaster
Boca Raton, Fla. (PRWEB) November 1, 2010
Most people will tell you British Petroleum (BP) is a bad investment. James DiGeorgia, publisher of The Gold and Energy Advisor (http://www.goldandenergyadvisor.com), says it's one of the most undervalued oil and energy companies in the world, and that's why he's recommending it.
"This is a risky recommendation because of potential legal and other liabilities from the Gulf of Mexico disaster," says DiGeorgia. "However, what makes BP so valuable is it has proved reserves of close to 18 billion BOE (Barrels of Equivalent Oil) and 45.3 billion BOE of non-proved reserves, of which 50% are oil."
DiGeorgia also notes that the reserve's life is about 43 years, which is very high.
Here's DiGeorgia's recommendation:
- The stock is close to its high, so sell short a put to buy the stock at a lower price.
- Open to sell short the BP Nov $40 put, symbol BP101120P40 at the market.
- The stock is around $39.90, and the option is around $1.17. If we are assigned, our cost basis will be about $38.83.
DiGeorgia also points out that BP stock did not go through a basing period which is typical after a major correction. The stock is seeing resistance at the $42.50 area, with support at about $37.50.
DiGeorgia says BP took a $32 billion charge off related to the Gulf Oil disaster. They announced that they plan to sell up to $30 billion in assets to help cover costs over the next 15 months. BP CEO Bob Dudley, stated the company would like to reinstate their dividend early next year.
To view the special report with more information about the BP recommendation, and for a 90 day free trial to The Gold and Energy Advisor, visit http://www.goldandenergyadvisor.com/page/gez/free/issue.html?x=press-13
About The Gold and Energy Advisor
The Gold and Energy Advisor is a monthly newsletter that covers the precious metals, and energy markets with the single goal of delivering money making recommendations to its subscribers. It also provides frequent updates and special reports about investing. The Gold and Energy Advisor is edited by James DiGeorgia, who has extensive experience in precious metals and the energy markets, and is considered one of the world's foremost authorities in both areas. For more information, visit http://www.goldandenergyadvisor.com/page/gez/free/issue.html?x=press-13
Reeves Laverdure PR
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