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The Zacks Analyst Blog Highlights: Unit, Black Stone Minerals, Bonanza Creek Energy, Par Pacific and Suburban Propane Partners

Zacks Equity Research

For Immediate Release

Chicago, IL – January 10, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Unit Corp. UNT, Black Stone Minerals, L.P. BSM, Bonanza Creek Energy, Inc. BCEI, Par Pacific Holdings, Inc. PARR and Suburban Propane Partners, L.P. SPH.

Here are highlights from Wednesday’s Analyst Blog:

Oil Posts Longest Winning Streak in More than a Year: 5 Picks

On Jan 8, oil futures closed in the green for the second straight session, marking the longest stretch of gains in nearly 18 months. OPEC’s decision to reduce supplies by 1.2 million barrels per day (bpd) during the first six months of 2019 is the major factor on the supply side boosting prices. The cartel’s oil production declined to a six-month low in December, per a fresh S&P Global Platts survey.

A confluence of factors on the demand side is also lending support to crude prices. This includes Jan 4’s exceptional jobs report, which has reassured investors about the strength of the U.S. economy.

Meanwhile, the Fed Chair struck a dovish tone in his comments last week, seeking to assuage markets. Progress on the trade talks’ front has added to bullish sentiment. This is why it makes sense to bet on oil stocks in 2019.

Prices Seal 18-Month Long Streak of Gains

On Jan 8, WTI Crude for February delivery increased 2.6% or $1.26 to $49.78 a barrel. This is the highest level recorded for a monthly forward contract since Dec 17, per data from Dow Jones Market.

Significantly, this marks the longest stretch of gains since the eight-session winning streak, which ended on Jul 3, 2017. Meanwhile, March Brent crude advanced 1.4% or $1.39 to $58.72 a barrel. This also marks its longest winning streak in around 18 months.

OPEC’s December Output Plummets, Saudi Arabia Plans Further Cuts

Analysts think that OPEC’s decision to reduce output by 1.2 million barrels per day during the first six months of this year is primary supply side factor fueling the recent crude rally. Meanwhile, a survey released by S&P Global Platts revealed that OPEC output had declined to a six-month low in December.

Additionally, Saudi Arabia is looking to reduce crude exports to nearly 7.1 million bpd by the end of this month, per a Wall Street Journal report released on Jan 7. OPEC officials revealed that this is an attempt to boost prices above the $80 a barrel mark.

Demand-Side Factors Also Likely to Support Prices

Several demand-side factors are also likely to support crude prices in the months ahead. Negotiations between top U.S. and Chinese officials entered its second day on Jan 8. A successful deal would go a long way toward supporting oil prices since China is a major importer of crude.

Meanwhile, Jan 4’s bullish jobs report has dispelled concerns about the U.S. economy. Investors are currently looking to ignore speculation over a near-term recession. The Fed Chair’s recent market-friendly comments have also served to boost optimism.

Our Choices

Crude prices have started the year on a particularly strong note. While analysts attribute the recent rise to OPEC’s fresh production cuts, other factors are also at play. A resolution to the U.S.-China trade conflict could reassure investors about demand in the medium term.

Strong jobs data and the Fed Chair’s recent supportive posture are other demand-side forces supporting crude prices at this point. Taken together, these factors make oil an excellent investment in 2019. However, picking winning stocks may be difficult.

This is where our VGM Score comes in. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.

We have narrowed down our search to the following stocks based on a good Zacks Rank and VGM Score.

Unit Corp., along with its subsidiaries, is a diversified energy company.

Unit Corp carries a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. The company has expected earnings growth of 84.4% for the current year. The Zacks Consensus Estimate for the current year has improved by 12.1% over the last 30 days.

Black Stone Minerals, L.P. is an owner and manager of oil and natural gas mineral interests in United States.

Black Stone Minerals carries a Zacks Rank #1 and has a VGM Score of B. The company has expected earnings growth of 41% for the current year.

Bonanza Creek Energy, Inc. is engaged in the acquisition, exploration and development of onshore oil and natural gas properties in the United States.

Bonanza Creek Energy has a VGM Score of B. The company’s expected earnings growth for the current year is 57.3%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Par Pacific Holdings, Inc. manages and maintains interests in energy and infrastructure businesses.

Par Pacific Holdings carries a Zacks Rank #2 (Buy) and has a VGM Score of A. The company has expected earnings growth of 39.6% for the current year. The Zacks Consensus Estimate for the current year has improved by 16.7% over the last 30 days.

Suburban Propane Partners, L.P. is engaged, through subsidiaries, in the retail and wholesale marketing of propane and related appliances and services.

Suburban Propane Partners has a Zacks Rank #2 (Buy) and VGM Score of B. The company has expected earnings growth of 27.7% for the current year. The Zacks Consensus Estimate for the current year has improved by 2.6% over the last 60 days.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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