- (2:30) - U.S. Revs Up Crude Oil Production
- (7:45) - Sheraz's Favorite Oil Stocks
- (12:00) - Refiners and Service Stations Stocks
- (15:20) - How To Invest In The Oil Market
- (16:35) - Where Will Crude Oil Be At The End Of 2017
- (19:00) - Episode Roundup: Podcast@zacks.com
Welcome to Episode #79 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Sheraz Mian, Zacks Director of Research, who is also a former oil analyst.
Tracey and Sheraz have covered the energy market, and specifically the oil stocks, several times over the last 2 years on the podcast. Sheraz even called the bottom in crude correctly in early 2016.
But Tracey and Sheraz, and everyone in the industry, thought crude would rebound faster than it has. Most analysts saw $60 a barrel by the end of 2016. That never happened. And now we’re nearly 5 months into 2017 and it’s still under $50.
One difference in this cycle is the ramp up in the US shale industry. The US rig count has doubled in just the last year as the American shale companies get back to the business of drilling.
But are they drilling too much, too soon? And will they out drill even the OPEC supply cuts?
Energy Shares Take a Hit in 2017
After rallying in 2016, the energy stocks have been hit in 2017. While the big integrated oil companies retreated about 10%, the small cap E&Ps have been crushed with some falling 40% on the year.
That means there’s a buying opportunity out there for savvy investors.
But which areas of the oil patch should you be concentrating?
Big Oil? The smaller E&Ps?
The drillers or the service players?
Sheraz reveals his top areas he thinks investors should be focusing on.
5 Stocks to Buy as Oil Rebounds
1. Exxon XOM is one of the most complete of the big integrated oil companies with refineries, service stations and one of the largest chemical companies in the industry.
2. Chevron CVX remains Sheraz’s top pick among the big integrated oil companies. It pays a nice dividend currently yielding 4.1%.
3. Halliburton HAL is a way to play the services side. As the rigs resume operation, it’s the services which will see the first benefit.
4. RPC Inc. RES is a mid-cap services company providing pumps and tools along with other services to the oil industry. It pays a dividend yielding around 1%.
5. Pioneer Natural Resources PXD was one of Sheraz’s top picks in 2016. Does he still like it?
With the global economy on the rebound, oil isn’t going to stay in the cellar forever.
Find out what Tracey and Sheraz think investors should be doing in the energy sector in 2017 on this week’s podcast.
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Chevron Corporation (CVX): Free Stock Analysis Report
Exxon Mobil Corporation (XOM): Free Stock Analysis Report
Pioneer Natural Resources Company (PXD): Free Stock Analysis Report
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