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PKZ: A Canadian In Kazakhstan
The ADR Alert
Monday, March 8, 2004
By Alexander Green, Investment Director
E-Mail – #2
****PKZ: A Canadian In Kazakhstan
Today’s addition to our trading service is international in
three respects.
It’s a Canadian company doing business in the Republic of
Kazakhstan and trading on the New York Stock Exchange (as
well as exchanges in Canada and Europe). And while it’s a
more aggressive trade, it also has a great deal of short-
term potential.
The company, headquartered in Calgary, is PetroKazakhstan
(NYSE: PKZ).
With a market cap of $2.3 billion, PetroKazakhstan is an
independent oil and gas producer that has been operating in
the Republic of Kazakhstan for over six years. The company
has proved and probable reserves of 518 million barrels of
sweet, lite crude. And it is the largest private oil
company in the country.
In 2003, production averaged 151,349 barrels of oil per
day, an 11% increase over 2002. Last year the company
completed a number of key projects, drilled five new wells,
and hydraulically fracture stimulated one additional well.
With oil prices high and world economies on the mend,
business at PetroKazakhstan is very good. For the nine
months ended in September, revenues rose 42%, to $806.7
million. And net income increased 93%, to $227.1 million.
Other financial measures at the firm are strong too.
Operating margins top 38%. And the company is earning an
enormous 78% return on equity.
Yet the stock is selling at just 9 times earnings. That’s
cheap.
It’s worth noting too that technically the stock is very
strong. The stock has been rising on heavy volume and is
trading well above its 50-day moving average of $23.70.
Kazakhstan is not Switzerland, of course. So this is
likely to be a volatile stock. In my view, however, it’s
also likely to be a profitable trade.
***Action to Take***
Buy PetroKazakhstan (NYSE: PKZ) at $31 or better. And
place a sell stop at $24 for protection. Speculators may
want to look at the August $30 calls (symbol: PKZ-HF). But
don’t pay more than $2.35.
If you have any questions, feel free to call one of our VIP
Trading Services representatives at 888.570.9830 (toll
free) or 410.223.2679, or Pillar One Partner Greg Galloway
at 800.438.3040 or 407.667.4729.
All International Trader Alert recommendations will be
posted on the Club’s web site. Simply go to
http://www.oxfordclub.com and click on “International
Trader Alert.”
The new password is: wall
Current Portfolio:
Stock Country Current Comment
Price
PetroKazakhstan
(NYSE: PKZ) Canada New Buy at $31 or better.
Place a sell stop at $24.
Qiagen
(Nasdaq: QGENF) Netherlands $13.93 Buy.Sell stop is 11.00.
Bio:
Alexander Green is the Investment Director of The Oxford
Club. A Wall Street veteran, he has over 16 years
experience as a research analyst, investment advisor, and
professional portfolio manager. Mr. Green is also
considered one of the most talented financial writers in
the business. He’s been featured on “The O’Reilly Factor,”
profiled by Forbes and Marketwatch.com, and has written for
Louis Rukeyser and several other leading financial
publications. He currently writes and directs The Oxford
Club Communiqué, the Oxford Insight e-letter, and four
elite trading services: one focused on momentum stocks,
another focused on companies with significant insider
buying, another dedicated to international growth stocks
and another focused on short-selling fundamentally flawed
companies. Mr. Green is also a top-rated speaker at
financial conferences around the country.
@2004 The Oxford Club, LLC. The Oxford Club does not act as
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