XTO Energy: Best Track Record In Energy Stocks

Reporting first quarter 2007 results on April 25, buy-recommended XTO Energy (XTO) delivered progress that justifies our estimate of Net Present Value [NPV] of US$60 a share. The single most important characteristic may be 71% concentration on clean fuel. No New York Stock Exchange energy stock has a better record than XTO’s 50-fold gain since 1993 when it started trading.

For the politically risk-averse it can be consoling that XTO is domiciled in the U.S. and has all of its assets in the same country. Environmentalists can take heart that every btu from coal displaced with one from natural gas cuts the related carbon dioxide emissions by a half.

Momentum investors can be encouraged that stock price and six-year natural gas price look like they have formed bases and embarked on new advances with current quotes above the 200-day or 40-week average. For extra potential, natural gas as a commodity could appreciate 70% relative to oil in a strong demand situation.

Liking the strategic appeal, the valuation and the performance, we favor XTO stock at a full weighting in our illustrative energy portfolio concentrated on real assets that promise a high return providing clean energy for global growth.

Originally published on April 25, 2007

XTO 1-yr chart: