Replies to post #32403 on SwingTrade Member Forum (SWING)

[EVO]

Stock Guru's Recommendation on HEC

INFO FROM YAHOO BOARD SO I DONT KNOW HOW ACCURATE IT IS



by: cosmicschool
Long-Term Sentiment: Strong Buy 12/15/03 11:58 am
Msg: 79546 of 79560

URGENT TRADE RECOMMENDATION



Harken Energy Corporation (AMEX:HEC)

Obviously choosing back-to-back recommendations for the Oil & Gas industry tells you something about what we see in the market. Harken Energy is an especially strong company that has benefited greatly in the last two quarters to an upswing in the oil & gas industry.

FUNDAMENTALS:

Fundamentally, the company is strong with net increases in revenue for the six months ending June 30, 2003 compared to the same period last year. The difference is net income of $1,448,000 compared to a net loss of $5,906,000 when comparing the two periods. This is despite a decrease in production volumes in both the US and Colombia. Colombia is particularly important to Harken with their relationship with Ecopetrol. That is the state-owned Colombian oil company.

Again - fundamentally speaking they are strong and getting stronger. The primary risks they have has more to do with the political conditions in Colombia and the ability of Escopetrol to continue paying their obligations to Harken. To quote from Harken's 10-Q,

"Harken sells its domestic oil and gas production to a broad and diverse group of industry partners, and as a whole, do not represent a significant credit risk. In addition, Harken charges certain industry partners, who participate in Harken-operated wells, with their share of drilling costs and operating expenses."

This really does mitigate the problem as we see it.

WHY IS HARKEN A MOVE TO MAKE IMMEDIATELY?

Look at what is going on in the country right now. Energy is the next big issue. It will likely be nearly as significant as terrorism. It is clear that our country will be spending many billions of dollars correcting the problems that plagued the Northeast two Fridays ago. While that does not directly relate to oil and gas exploration, there is going to be a huge emphasis on both.

HEATING OIL THIS WINTER. Do you really think the people of the Northeast are going to be willing to depend on their electrical grid to keep them warm this winter? Remember, that grid did not collapse as far South as Atlanta - but it does include Atlanta and neighboring states. Fuel oil is NOT used for heating when you get through the middle parts of the country.

Heating oil is very likely going to be competing for oil reserve production with gasoline and diesel.

NATURAL GAS: This is very significant for production of electricity. Energy will have to be produced in abundance to assure that what happened two Fridays ago does not happen again. This means more wasted production of electricity just to make sure all demand is met. This will mean that areas that normally would rely on "bringing in electricity from adjacent parts of the grid" are more likely to make sure all of their production is on-line and going. Domestic natural gas revenues were up 11% for the six months ending June 30, 2003 compared to the same period the year before. That's with declining production.

FILLED UP AT THE PUMP LATELY? The price is rising for the normal Labor Day holiday. Of course that normally backs off.

THIS IS AN ALL NEW ENVIRONMENT FOR TRADING HEC:

It is already up about 25% in recent days. Normally that would disqualify my selection. Harken is about to go into some of what I see as the most profitable months in its recent history. Revenues are likely to shoot up with profits doing the same thing. What is a $0.43 stock on Friday's close is likely to be a $2 stock by year's end. This is a scenario that is too important to pass on.



TARGETS

Thirty days: $0.60

Year end: $2.00

One Year : $5.00


RECOMMENDATION ISSUED: August 24, 2003 - 8:25 PM EST