This Oil Stock Looks Very Cheap

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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.

Oil was up big last week and many oil stocks responded. Both ExxonMobil and Chevron, the two big boys of oil in the Dow Jones Industrial Average, moved up nicely on the day following the 9% rise in oil prices. SandRidge Energy, a leading contender for the next energy stock to enter John and David's real-money 10-Bagger portfolio, also had a big day. John and David think that Denbury Resources in particular looks very attractive right now. The tertiary recovery specialist is priced for $55-$60 oil. That might be where we are headed in the short run. But over the next five years, oil will likely trade at much higher prices, and shareholders will be rewarded as a result given Denbury's low cost of extraction. That's why John and David own shares and are considering buying more.

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At the time this article was published David Meierhas no positions in the stocks mentioned above.John Reeveshas no positions in the stocks mentioned above. The Motley Fool owns shares of Denbury Resources and ExxonMobil.Motley Fool newsletter services recommendChevron. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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