Boom: Continental Resources
If the Bakken shale formation — which sits under Montana, North Dakota and parts of southern Canada — is a mine of black gold, then Continental Resources (CLR) is the modern-day Jed Clampett.
As the region’s largest lease owner, producer and driller, CLR is well positioned to cash in on a fracking boom that could generate 850,000 barrels of oil per day — just this year. The company believes it easily could triple its production volume over the next four years.
CLR has a puny PEG ratio of 0.49 and trades at 13 times forward earnings. The stock has gained more than 50% since last August, but that doesn’t mean it’s all out of growth. The company recently won a 10-year federal minerals lease for 400 acres of prime land in Mountrail County, N.D. On the downside, though, CLR’s cash flow is pretty grim.
If you’re betting big on fracking, the two “boom” stocks above are attractively valued to buy and hold. But if you believe the golden goose of fracking is about to be cooked by regulators or short-term pricing woes, you’ll want to consider the next two stocks: