Is It Time to Buy This Oil Company?

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

David has been reading more about SandRidge Energy, and is becoming more interested in the stock. It's become the leading driller in the Mississippian and Central Basin, and was able to increase average daily production last quarter. David is somewhat concerned about the company's cash flow, as it continues to invest hand over fist. All in all, the stock price has declined of late, so the question is how much risk one is willing to take.

Energy stocks, like SandRidge Energy, offer something for all types of investors. Some companies rise and fall with oil prices, while others provide more steady returns over the long haul. The Motley Fool has identified a company that will prosper for years to come. Read more about an energy stock set to soar in our special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this under-the-radar company before the market does. Click here to access your report -- it's totally free.

David Meier has no positions in the stocks mentioned above. John Reeves has no positions in the stocks mentioned above. The Motley Fool owns shares of Sandridge Mississippian Trust II and has the following options: long Jan. 2013 $16.00 calls on Chesapeake Energy, long Jan. 2013 $25.00 calls on Chesapeake Energy, long Jan. 2014 $20.00 calls on Chesapeake Energy, and long Jan. 2014 $30.00 calls on Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On May 22, 2012, at 4:49 PM, kmacattack wrote:

    I like Sandridge. They are a very well run company, and although they don't keep a lot of cash on hand, they use cash to buy properties which will generously reward shareholders in the long run. They are producing oil in Oklahoma, according to chaiman Tom Ward, for about $6.50 per barrel. When natural gas rebounds, they are going to be extremely profitable. The Koch brothers, according to T Boone Pickens, have manipulated natural gas prices to the basement, for their own selfish agenda. They make far more money in their chemical and fertrilzier plants when nat gas prices are dirt cheap. The problem is that this country needs to convert the trucking fleet to natural gas and cut our dependence on OPEC oil. The Koch's and big oil gave a huge donation to Sen Mitch McConnell who then filibustered the energy bill which would have begun the conversion. Setting up the infrastructure, the fill statons on the nations interstates, is the only holdback preventing a mass conversion, and it would only have cost $450 million to build the stations. It could have been done on a low interest loan basis and cost taxpayers nothing. Instead, the Kochs lobbied McConnell and other republicans to block the bill, which had 59 votes in the senate and 85 percent support among Americans. You can thank McConnell and the Kochs for protecting big oil's price fixed monopoly of the fuel market, which manipulated gasoline prices up to $4.00 for no reason, other than the oil companies were assured that $500,000 was enough to keep McConnell in the hip pocket of big oil and the Kochs. If the senate would have passed the energy bill in 2009 after the house overwhelmingly approved it, the nat gas superhighway would be nearly complete. American consumers would have had $9 Trillion more in their pockets which has gone straight to OPEC bank accounts, plus about $5 Trillion more that big oil has extracted from us since they can sell gasoline for whatever they feel like. They have no competition. CNG fuel sells for $0.98 per gallon locally, 1/4 the price of diesel and gasoline (it was $0.78 a couple of months ago). Gasoline sells for $0.11 per gallon in Caracas today. Why are we paying 35 times the price paid in other countries? And drill baby drill is NOT the answer. Big oil will still have their monopoly, and the oil from the Keystone pipeline will end up on the gulf coast, where it can be loaded on tankers bound for China. We are going to be bidding for our own oil, subsidized by US taxpayers against China, India, etc. I'm in favor of drilling, but the big international oil companies need to give up all their welfare programs written in the tax code. When Exxon is making $440 Billion per year, they don't need for you and me to subsidize them with welfare. The Koch brothers and big oil have no loyalty to this country whatsoever. Their only priority is to squeeze every last dime out of us that they can get away with. It's time they had some competition, and gave up their "sugar daddy" allowances.

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