My latest column is up at RealMoney.

I usually want a stock to score highly in four out of five categories before giving it much consideration: earnings momentum, earnings quality, price momentum, free cash flow and return potential.

This week, only three stocks went four for five, and I’ve talked about them all before: W&T Offshore (WTI) , Pitney Bowes (PBI) and Rent-a-Center (RCII) . As I look for new investment ideas, I’m left with three options, each of which has significant drawbacks.

Go short Change strategy Stay on the sidelines

I seldom

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Some of the explanations for the dollar jump rely upon the perceived weakness in the dollar's value (and hence, by extension, Fed policy). Does this make sense? As I've remarked before [1], there is likely two way causality between the dollar's value and the price of oil denominated in dollars. One way of taking out some of the numeraire issue is to see how a price of a barrel of oil would be, expressed in other currencies. In the figure below, I compare the dollar price against that in euros, and against that in the Special Drawing Rights (SDR). Figure 1: Price ber barrel of oil (WTI), in USD (blue), in SDR (red), and in EUR (green). Squares indicate values for June 6. NBER defined recession dates shaded gray. Sources: St. Louis Fed FREDII; IMF International Financial Statistics; Pacific Exchange Services; and author's calculations. The weights for the USD, EUR, ...

Article Source Following up on this post from October 2006, when oil was only $58.88 (WTI,daily average) a barrel, consider this excerpt from today's Thomas Net: The impact of rising transportation costs, driven significantly by high oil prices, is already being seen in capital-intensive manufacturing that carry a high ratio of freight costs to the final sale price. But a new report has determined that higher energy prices are affecting transport costs at such an unprecedented rate that "the cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today." The CIBC report upon which this article is based focuses on ship transport. One interesting tidbit: The cost of shipping a standard 40-foot container from East Asia to the US eastern seaboard has already tripled since 2000 and will double again as oil prices head towards $200 per barrel... The note discusses how the decreasing in tradability of ...

Our April 14th call for an upper range of $130 for WTI light sweet crude is being adjusted upward to $140/bbl for the same reasons we’ve outlined before: strong world demand and that the days of easy access to sweet crude are in the rear view mirror. As one example, last week it was reported that output from Mexico’s Cantarell oil field plummeted to just over 1 mln barrels per day. True, the Mexicans could tap copious deep sea patches in the Gulf, but constitutional barriers bar the deep pocketed foreign partners from getting involved. Internal political dis-unity has prevented a constitutional change from taking place. So they’ve blown it to the point where there won’t be any deep sea production from Mexico for 20 years. James Polk and Sam …

… and that begs the question of where to next? Crude cannot sustain this advance indefinitely. With the month only 9 days old — yes, some like it hot, some like it cold, some like it in the barrel 9 days old — WTI light sweet is up a stupendous 11% month to date! Thus, the rise has become quite parabolic and the danger of a short and sharp correction should be a part of every trader’s thinking. (See our crude trading range upgrade from mid-April a few posts below.)

Lesson learned from this recent leg up? 87 mln is the number to remember. 87 million is about DAILY world consumption of barrels of black gold. 87 MILLION 42-gallon barrels of crude on the wall.. you take one down, pass it around…

Pundits have been puzzled by how …

My latest post is up at RealMoney. I think there is still quite a bit of run left in the energy bull market. That belief has led me to some good picks, such as Patterson Uti (PTEN) and Flowserve (FLS) , as well as one bad one, Frontier Oil (FTO) . My models recently brought W&T Offshore (WTI) into focus, and I’m thinking it is more likely one of the former than the latter. The stock shows up very well in the Stock Market Beat models: Earnings momentum score: 1 (Positive) Earnings quality score: 5% (Positive) Price momentum score: 37% (Positive) Free cash flow yield: 10.6% (Positive) Return potential: 16.8% (Positive) Capital expenditures are ramping up, which will hurt free cash flow in the near time. If the expenditures are as successful as those of the past, however, the cash should start flowing again after a ...