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Energy ETF (IEO) Hits New 52-Week High

Zacks Equity Research
Sector ETF report for IEZ

For investors seeking momentum, iShares U.S. Oil & Gas Exploration & Production ETF IEO is probably on radar now. The fund just hit a 52-week high, and is up more than 39% from its 52-week low price of $56.42/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

IEO in Focus    

It tracks the Dow Jones U.S. Select Oil Exploration & Production Index providing exposure to companies engaged in production, exploration and distribution of oil and natural gas. IT comprises 68 holdings with ConocoPhilips COP, the top weight holder, having 12.6% weight. The fund charges 43 bps as fees in a year (see: all the Energy ETFs here).

Why the Move?

The energy sector has been performing strongly. Brent prices jumped to the highest level in nearly four years on potential U.S. sanctions against Iran expected from November. Simultaneously, gas prices also soared to their highest level in four years. Per International Energy Agency report, America could surpass Qatar and Australia to become the largest exporter of LNG within the next 5-7 years. In September, demand for petroleum was the strongest for any specific month since August 2017, while demand for gasoline was the highest since 1945.

More Gains Ahead?

Currently, IEO has a Zacks ETF Rank #3 (Hold), with a High risk outlook. So, it is hard to get a handle on the fund’s future movement. Decent returns could be expected as the fund carries a   positive weighted alpha of 33.2. So, there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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ISHARS-US O&G (IEO): ETF Research Reports
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
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