by Kurt Wulff (McDep Associates)
Accelerating decline in Mexican oil production reminds us of hidden value in proven oil and natural gas reserves in buy-recommended producers including mega cap Total S.A. (TOT), large cap Anadarko Petroleum (APC), and small caps Berry Petroleum (BRY) and Cimarex (XEC). The Wall Street Journal calls attention to the "Plunge in Production" (see graphic below) after highlighting potential acceleration of decline a year ago.
For the four stocks, McDep Ratios at 0.85, 0.74, 0.74 and 0.58, respectively, point to increasing undervaluation. We suggest full unlevered weightings in the illustrative McDep Energy Portfolio for TOT, APC, XEC and a half weighting for BRY. Below the 200 day average, stock price below trend indicates the stocks are out of favor and investors may need more patience.
