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Closed at a five week low but still above 91 dollars a barrel.
Today -- my next guest is finding potential nonetheless in oil exploration companies just just people run away from them -- But -- says it's a stock pickers market he has got black.
A star on the.
Errands around tables since 1998.
In the last time he was on with us in October he picked a company got to hear this bonanza creek energy.
Up more than 55%.
Since Scott said it to you.
Hope you guys -- -- but if you didn't Scott Delphi and Scott Black of Delphi management he's the founder and president he's joining me now from Boston nice work on bonanza.
It turned out there may have been Kansas thank you live here welcome -- of course a lot of -- Viewer investors resemble what -- he got now we'll get to that in a minute but I need your macro picture here.
We have been hitting record after record does that worry you are you not of that.
Sort of anti rally.
Well I'm a marketing not -- like -- about but I try not to pick the market.
But if you look at small and mid caps bucks apiece are between 1819.
Times expected earnings this year they've been pretty well picked -- -- -- And the S&P.
I think the estimates on the street at 111 operating earnings are -- little bullion where -- one I'll forward -- still be up 7%.
Get you to -- about fifteen point three.
The historic norm in the post -- -- sixteen so there's a little ways to golf -- -- -- while the fact there's one we know Bernanke trying to keep the pedal to the metal.
He's got to continue to have to grow the ballot.
Can't -- you're hearing the Fed -- so what are you gonna fight hitter you gonna jump fan and really start to sniff around and pick the best names.
Well we think you know do you still have the wind he had back because of the quantitative easing him because also nominal interest rates on bonds -- so -- But I would tell people to be cautious you wanna stick with -- value investing it's not good to go chase something -- momentum that -- twentieth 25 multiple.
That has a five or 6% brought -- many of the consumer staples are selling at eighteen and nineteen multiples and it popped lying problem.
Like Procter & Gamble called the -- below that 5% does not doesn't not good value well.
It's interesting we had a guest yesterday you said that you should prune your investor garden at of those names that have done pretty darn well so just get rid of some of those winners some of the more ripe tomatoes in the garden.
I want to get your picks right now so bonanza creek was a real winner for you.
You -- another oil company it's a smaller one because you tend to sniff out the small and mid cap guys.
It's called -- sheet resource as I look at this it's had a nice run already -- a 119%.
Who still like him.
-- -- It's only a seven dollar stock has got about a 400 million market cap got a nice clean balance -- you don't have much financial risk -- net debt equity ratios.
-- point 19 but the good thing like bonanza creek is the production is probably -- 8085%.
Year over year albeit on a small base.
Interestingly enough there in the same fields as the DJ basin is the Wattenberg in the -- Cabrera.
If the marriage is about 56%.
And we figure we do our own numbers for August next year which is -- fiscal they should have discretionary cash flow about a dollar fifteen it would dollar 18 which makes only six times discretionary cash -- it just got too many.
It -- kind of a valuation growing -- 80% year over year production so it is speculative but I think it's a very good value of -- -- ever heard of this company.
Okay now they have now they have again it's called.
Synergy resources your next pick is Amdocs that's up 11%.
Were running tight on time can you give me a line on this one quickly.
Yes basically it almost six dollars a share in cash is the billing algorithms that change your cell -- -- place -- mobility.
It's a cash machine the cup appearance 15% on book and is selling Iraq -- nine point seven times this -- is earnings extra cash.
I mean doesn't matter whether you've got a Samsung never an apple is one -- doing text messaging a roaming somebody's got to keep score is about how the billing goes and that's what's inside your phone it's a great company they generate a dollar for dollar net income and free cash flow they continue to buy back shares they -- back -- billion dollars worth of Enron stock in the last three.
I've never challenge you to Trivial Pursuit on anything Scott you have that kind of brain thank you so much we appreciate you coming up and give -- -- welcome we're gonna put his picks on our FaceBook dot com slash -- -- page.
He's Scott Black Delphi management founder and president closing bell ringing and.
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