JBL: Alternative Energy

Some analysts are seeing the top of the market for Deere. I believe they are missing the bigger picture. Deere is trading at a forward multiple of just over 10, based on consensus fiscal 2006 earning estimates of $6.27 per share. Deere is trading 15% below its 52-week high. Wall Street has written off a great company.

With demand for alternative energy and rising corn prices, Deere is a natural beneficiary of the times.

Deere is schedule to report fourth-quarter earning Tuesday. While it's always dicey to buy stocks ahead of earnings, I believe Wall Street will be pleasantly (and positively) surprised at what it has to report.

Oil Sands

China is rapidly trying to buy up oil reserves; the Chinese learned from the Japanese that investing in exploration is not a better alternative to just buying the reserves. China has shown interest in the oil sands of Alberta, Canada.

I do not believe China will have any luck buying up oil reserves in the oil sands, just as it was shut out of the deal with Unocal. However, the Alberta Sands is a terrific play on oil that is far from sources that have crazy politics.

Most oil companies are having a hard time keeping production levels constant. Conversely, Suncor(SU Quote) claims that it can double production by 2010 to 500,000 barrels a day.

Most oil companies have huge exploration costs. Not Suncor, which sits on one of the top proven oil reserves in the world. Suncor has no exploration costs. Maintenance and production costs are fixed. The knock against Suncor is the costs associated with getting oil out of the ground. But although other oil companies are facing higher exploration and drilling costs because of having to drill in deeper waters, Suncor only needs oil to remain about $20 a barrel to make extraction economical. I believe that is a safe bet.