Anadarko (APC) is one of the largest independent oil and natural gas explorers and producers(E&P) in the world. I believe it will eventually become a takeover target and that’s why I have recommended it many times over the past few years with very profitable results.
In late November, for example I recommended APC and after writing some covered calls against the 400 share recommended position was able to lower the cost basis on that position to $78.61 a share. That position was closed out at $85 when the shares, or those remaining were assigned at expiration, the covered calls rallied into the money.
Those following my recommendation should have netted approximately $6.39 a share times the 400 shares recommended for a profit of $2,556 net profit. A profit of about 8% in just under 3 months ago.
I recommended re-entering APC with 400 shares at $82.50 in February because I believe the E&P is a prime takeover target, that could receive a merger/buyout offer of $128 to $134 a share.
The institutional analysts covering APC are starting to ALSO turn bullish – something I expect most analysts on Wall Street didn’t think would happen this quickly. Consider for a moment the pessimism in the oil market just a few months ago with major analysts predicting $30 oil.
Now most analysts are turning bullish on APC with targets has high as $117 a share.
Erlangerchartroom.com sentiment indicators are STILL leaning bullish but creating enough concern about a retest of its April breakout that its share price is dipping below $88 a share. This is setting up an incredible buying opportunity. WTI is now trading for over $60 a barrel again. I’ve predicted we would see BRENT claim back between $70 and $75 before the end of the year, with a nice rally into the beginning of summer.
Recommendation: Open a new position on a dip to $88 a share or lower. Double your positions in the event that APC dips to $86 or lower. This should be a good money maker if you get your shares at these levels!
My upside target is over $100 by the end of the year assuming there is no takeover or merger. If one materializes we could see APC’s share price vault over $120 a share.