Speculative Stocks: For me, a speculative stock offers the potential to at least double in the next 12 months, but it also carries lots of downside risk.
In energy, one such stock springs quickly to mind: Transocean (RIG). RIG dominates deepwater drilling floaters, but the company is on the verge of drifting into junk bond territory, and it has court cases pending that will define its financial responsibility for the Macondo disaster of last year.
Still, in 2008 RIG shares traded for $160. Back then oil prices were not much higher than they are today and daily rig rates weren't much different. RIG trades for about $42 a share today.
Another speculative idea might be trying to gain exposure to the exploding development of the Bakken or Permian basins with smaller-cap explorers and producers such as Cabot Oil & Gas (COG) and Kodiak (KOG). But both are richly priced already, and you are mostly wagering on a takeover bid -- not normally an easy pick to make.So there you have it: my picks for 2012 in energy. What's most important to remember is not the specific picks but the thesis that energy should continue to outperform the rest of the stock market. Using that thesis, you should look for your own investment ideas. At the time of publication, Dicker owned XOM, COP, SLB, HP, RIG.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV