Jeff Saut, one of the top market strategists on Wall Street, says the rise in crude oil prices seems to have reached an "inflection point" after its torrid run of late, but he doesn't view that as a reason to get out of the energy space entirely.
This opinion from the Raymond James axe is notable, considering he was one of the few table-pounding raging energy bulls last summer. If you listened to him then and made a blanket bet via, say, the Energy Select Sector SPDR (XLE), a basket of energy-related names, you'd be up an impressive 60%, give or take.
Saut sees continued gains from some unusual suspects, particularly oil sands plays. If you guessed, as I did, that oil sands are synonymous with Suncor Energy (SU) you'd be wrong. Saut is instead keying on Linn Energy LLC (LINE). Somewhat off the market beaten path, Linn, which has a $6 billion-plus market cap, has oil and natural gas reserves, as well as a stake in the shale-based oil sands.
And if you like the shale story, Saut says "the hot talk right now is a Utica shale play." His top pick here is EV Energy Partners (EVEP). His firm Raymond James has an "outperform" rating on the stock.
Saut believes cheap energy is gone for good. Unswayed by arguments that government posturing and delays will make domestic production of shale energy unfeasible, he says crude would have to decline by more than half to obviate the need for the U.S. to explore different domestic production. New technologies will ameliorate the environmental concerns, as will the financial demands high energy places on the U.S. economy.
Jeff Saut's work is always must-read. Today he's a must-view as well.
Watch the video, soak up his insight and tell us what you think at email@example.com.