|Bid||9.27 x 3100|
|Ask||9.28 x 4000|
|Day's Range||9.18 - 9.45|
|52 Week Range||9.18 - 18.00|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||-23.49%|
|Beta (5Y Monthly)||1.70|
|Expense Ratio (net)||0.60%|
The OPEC and its allies including Russia are reportedly in discussion for deeper output cuts by another 500,000 barrels a day to stabilize the coronavirus-infected oil price.
Yes, 2019 was a rough year for the energy sector. The group saw its weight dwindle in the S&P 500 en route to finishing the year as the worst-performing group in the benchmark. Still, thanks to a late-year rally, the Energy Select Sector SPDR (NYSEARCA:XLE) was able to finish the year higher.Source: Casimiro PT / Shutterstock.com However, things were much, much worse for natural gas shale producers. Consider the following. The First Trust Natural Gas ETF (NYSEARCA:FCG), an exchange-traded fund that frequently has dog status, lost almost 20% last year, but look good compared to the 60% shed by Chesapeake Energy (NYSE:CHK).Losing 60% in a year in which the S&P 500 posted its best annual showing in more than two decades alone is disturbing. Even more alarming is that Chesapeake finished the year down by that much even with the benefit of a 38.7% December rally.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMuch of the December bullishness was accrued early in the month after Oklahoma-based Chesapeake was able to procure $1.5 billion in financing from a consortium of banks, helping it stave off bankruptcy. Still, some analysts believe that's no more than a temporary fix and that the capital isn't a silver bullet for Chesapeake's deep financial woes. Awash in WoesIn July 2015, the company slashed its quarterly dividend. Six months later, the company suspended the payout on its preferred shares, contributing to its lower credit ratings. Remember, preferred stocks have bond-like properties and are higher up in the pecking order than common stock in the event of bankruptcy. * 7 Stocks to Buy for January and Beyond In other words, it's bad when a company cuts or suspends its dividend on its common equity, but it's much worse when negative payout action comes to preferred stocks. When it revealed that 2015 dividend cut, Chesapeake traded close to $20.Chesapeake had a $1.7 billion market capitalization as of Jan. 2. However, its debt burden is in excess of $9 billion, or about six times its market value. Additionally, the company is grappling with annual interest expenses of $700 million. That's almost half its market cap.So it's not surprising that Moody's Investors Service recently lowered a variety of ratings on Chesapeake. What may be surprising is that the shale producer clings to ratings in "B" territory and hasn't dropped to the highly speculative "CCC" range.Keep in mind that the company recently engineered a debt swap with bondholders. Those investors received around 57 cents on the dollar for their investments. One need not be a fixed income expert to realize that financially sound companies don't engage in those type of maneuvers. Bottom Line: Chesapeake Is Cheap for a ReasonI'm fond of highlighting the potential peril of stocks with low price tags. Even though Chesapeake can offer some near-term upside, the long-term prognosis here is bleak.With the U.S. awash in oil and natural gas, Chesapeake likely needs something along the lines of oil prices at $60 per barrel and gas at $2.75 per million British thermal units. The former is doable, but Henry Hub gas closed at $2.18 on Dec. 31.Further vexing Chesapeake is that with natural gas prices low, assets are unattractive to larger oil companies. Many of those big names already enjoy robust gas footprints, so asset sales to raise capital probably aren't in the cards for Chesapeake over the near term.There are other points for investors to be aware of. Namely that all of the traditional valuation metrics on Chesapeake are low, implying value. However, the stock's performance coupled with the controversy surrounding the company likely means it's more of a value trap.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for January and Beyond * 7 Excellent Value Stocks to Buy for 2020 * 5 Hot Housing Stocks That Could Stay Hot in 2020 The post Chesapeake Energy Fighting Off Bankruptcy Doesn't Make It a Buy appeared first on InvestorPlace.
Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The last 12 months is one of those periods, as the Russell 2000 […]
Oversupply concerns are weighing on natural gas ETFs. And possibilities of normal weather are likely to keep those ETFs under pressure in the medium term.
Energy commodities, namely oil, are among this year's best-performing commodities. Predictably, that scenario is proving beneficial for energy ETFs.After tumbling 18.20% last year, the Energy Select Sector SPDR (NYSEARCA:XLE), the largest energy ETF, is up 17.70% this year, underscoring the point that energy is one of the best-performing sectors in the S&P 500 to this point in 2019.While betting against energy ETFs has been losing proposition so far in 2019, that does not mean the group is immune to potential downside. Energy is a cyclical sector and could be tested if investors continue favoring defensive groups. Additionally, energy ETFs could be pinched by slowing global economic growth, which would crimp oil demand.InvestorPlace - Stock Market News, Stock Advice & Trading Tips"With oil prices once again above our unchanged midcycle price of $55 per barrel, we see less value in oil-related stocks than we did at the beginning of the year," said Morningstar in a recent note. * Should You Buy Q1's 6 Best-Performing S&P 500 Stocks? Another variable to consider with energy ETFs is that sectors favorable seasonal period comes to an end in the middle of the second quarter. While that is not a guarantee of bad tidings with energy ETFs, it is something to consider because some of the following energy ETFs could be vulnerable to downside in the months ahead. SPDR S&P Oil & Gas Exploration & Production ETF (XOP)Source: Shutterstock Expense ratio: 0.35% per year, or $35 on a $10,000 investment. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA:XOP) is rallying this year thanks in large part to this energy ETF's often intimate correlations to oil prices, but this is also what makes XOP vulnerable to significant downside if oil tumbles.XOP is up 17.50% this year. On its own, that sounds impressive, but when measured against the aforementioned XLE, XOP has not been the better bet on a risk-adjusted basis because exploration and production stocks are usually much more volatile than integrated oil names that dominate traditional energy ETFs like XLE.XOP could firm if oil inventories tighten and/or demand picks up. Given this energy ETF's domestic focus, the fund could benefit if U.S. shale producers scale back output during the second and third quarters, but there are no guarantees that scenario comes to pass. VanEck Vectors Oil Services ETF (OIH)Source: Shutterstock Expense ratio: 0.35% per year, or $35 on a $10,000 investment. Another high flier that is highly tied to oil prices, the VanEck Vectors Oil Services ETF (NYSEARCA:OIH) is up 26.51% this year. This energy ETF shares something common with integrated oil funds: OIH is dominated by a small number stocks, namely Schlumberger Ltd. (NYSE:SLB) and Halliburton Co. (NYSE:HAL).Those two oil services giants combine for over 34% of OIH's weight. Any material retrenchment in those names makes it difficult for OIH to deliver upside. Good thing some analysts are bullish on Schlumberger. * 3 Healthcare Stocks to Trade Now "Schlumberger stands out as high-quality and favorably valued," said Morningstar. "The market seems to be underrating prospects for the SPM business, a fully integrated services model that aspires to deliver a sea change in oil and gas development costs. SPM is already delivering returns on capital far ahead of the rest of the company, and therefore the business will lift Schlumberger's profitability up as it grows as a share of revenue in years to come." United States Oil Fund (USO)Source: Shutterstock Expense ratio: 0.84% per year. The United States Oil Fund (NYSEARCA:USO) is an energy ETF that is a likely epicenter of vulnerability if oil prices decline. This energy ETF is widely viewed as the bellwether oil fund, excluding equity-based products, and is also one of the most heavily traded commodities funds of any stripe. USO provides exposure to front month West Texas Intermediate (WTI) futures and there are some risks associated with that methodology."This method is particularly sensitive to short-term changes in spot prices, but can also result in heavy roll costs," according to ETF.com. "That makes USO a great vehicle for riding short-term moves in crude prices, but long-term holders may want to look at other options."Fortunately for bearish traders, USO has a robust options market and this energy ETF is highly liquid, meaning it is easy and cost-effective to sell short. Invesco S&P SmallCap Energy ETF (PSCE)Source: Shutterstock Expense ratio: 0.29% per year, or $29 on a $10,000 investment. The Invesco S&P SmallCap Energy ETF (NASDAQ:PSCE) is the small-cap answer to the aforementioned XLE and that alone explains this energy ETF's potential vulnerabilities if another oil bear market arrives.With PSCE up 26.23% this year, more than double the returns of the S&P SmallCap 600 Index, envisioning major declines for this energy ETF over the near term may be hard to do. However, if oil falters in earnest, that could trigger concerns about global economic growth and if investors become concerned about the U.S. economy, small caps would likely retreat, creating a double whammy of sorts PSCE. * 5 Cannabis Stocks Set to Skyrocket -- According to Wall Street's Top Analysts This energy ETF's 39 holdings, which have an average market value of $880 million, "are principally engaged in the business of producing, distributing or servicing energy related products, including oil and gas exploration and production, refining, oil services and pipelines," according to Invesco. Invesco DWA Energy Momentum ETF (PXI)Source: Shutterstock Expense ratio: 0.60%. Like many of the energy ETFs highlighted here, the Invesco DWA Energy Momentum ETF (NASDAQ:PXI) has been solid this year. And like many of the energy ETFs mentioned here, PXI faces two-fold scenarios that could make the fund vulnerable in the event oil prices retreat.First and foremost, PXI's composition, which includes a heavy tilt to mid- and small-cap stocks, makes the fund vulnerable to energy sector declines. Second, a momentum-based strategy could weaken more rapidly than cap-weighted energy ETFs if oil prices quickly erode.One sign to steer clear of PXI in oil bear market is already clear: this momentum energy ETF is up just 15% this year, trailing cap-weighted rivals like XLE by more than 200 basis points. Global X MSCI China Energy ETF (CHIE) Source: Shutterstock Expense ratio: 0.66%. The Global X MSCI China Energy ETF (NYSEARCA:CHIE) is another example of an energy ETF with impressive year-to-date gains (CHIE is up 16.55%) where speculating on near-term declines is a tricky endeavor, particularly with Chinese stocks ranking as among the world's top performers.CHIE's underlying index includes "all eligible securities as per MSCI's Global Investable Market Index Methodology, including China A, B and H shares, Red chips, P chips and foreign listings, among others," according to Global X. * 5 Automobile Stocks to Consider Now CHIE would be vulnerable to broader retrenchment in Chinese stocks, which would likely weigh on the global energy sector given that the world's second-largest economy is still a major energy importer. Plus, with CHIE lagging the equivalent U.S.-focused energy ETFs this year, the risk/reward trade off here currently is not favorable. First Trust Natural Gas ETF (FCG)Source: Shutterstock Expense ratio: 0.60%. The First Trust Natural Gas ETF (NYSEARCA:FCG) is up more than 19% this year, which is an impressive showing for this energy ETF. FCG is a mid-cap fund as highlighted by a median market value of $3.27 billion for the fund's 33 holdings.One of the primary issues with FCG is trusting that this fund will maintain its lead over traditional energy ETFs if oil and natural gas prices stay high and that FCG will not overshoot rival energy ETFs on the downside if energy commodities fall.These are relevant points because FCG has a history of lagging standard energy ETFs like XLE. From 2013 through 2018, FCG never outperformed XLE and during rough years for oil, such as 2014 and 2018, FCG's were much more severe than those incurred by regular energy ETFs.Todd Shriber does not own any of the aforementioned securities.Compare Brokers The post 7 Energy ETFs That Could Be Running Out of Fuel appeared first on InvestorPlace.
First Trust Advisors L.P. announces the declaration of distributions for 115 exchange-traded funds advised by FTA.