Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Profit From Oil Bulls With Top-Ranked Energy Stocks

By Zacks Investment ResearchStock MarketsMay 21, 2018 09:31PM ET
www.investing.com/analysis/profit-from-oil-bulls-with-topranked-energy-stocks-200318250
Profit From Oil Bulls With Top-Ranked Energy Stocks
By Zacks Investment Research   |  May 21, 2018 09:31PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Oil price has been enjoying a smooth sail for the past couple of months with Brent hovering near $80 per barrel, the highest since 2014, and U.S. crude trading above $72 per barrel. The rally was driven by several factors that are pointing to a rebalancing of the oil market and infusing optimism among investors.

This has pushed the energy stocks higher, making it the best-performing sector so far in the second quarter. In particular, geopolitics and a historic output deal are playing the most important role in driving oil price higher. Below, we have discussed them in detail below:

Venezuela

Venezuela is the latest catalyst given the new sanctions by the Trump administration on the OPEC-member, following the second six-year term victory for president Nicolás Maduro that would further curtail oil output in the country. Output in Venezuela has already been halved since 2005 to below 2 million barrels per day due to an economic crisis.

Iran

Donald Trump finally withdrew from the Obama-era 2015 nuclear deal and has vowed to reimpose powerful economic sanctions against the OPEC nation waivered within the deal as well as introduce new ones. Since Iran is OPEC's third-largest oil producer and exports about 2.5 million barrels a day, renewed sanctions would reduce Iranian oil exports, further tightening global supplies.

Historic Output Deal

The historic output cut deal, wherein OPEC, Russia and other producers have agreed to curb production by 1.8 million barrels per day is paying off. The group started reducing production in last January and is poised to continue throughout 2018. As the group restrains crude output for the second year, oil inventories in the world’s richest nations have now fallen 1 million barrels below the five-year average, the level targeted by OPEC and its partners.

Mediocre Demand Outlook

Although accelerating economic growth across the world has been raising demand for the commodity, the International Energy Agency (IEA) warned that it is likely to moderate as crude nears $80 per barrel. The agency cuts its forecast for global demand growth to 1.4 million barrels per day for 2018 from the previous estimate of 1.5 million barrels per day.

Impressive Zacks Rank

The upside to the energy sector is confirmed by a solid Zacks Sector Rank in the top 25% with about 60% of the industries ranking in the top 43%. This suggests continued outperformance in the sector for the coming months.

Solid Earnings

Energy sector earnings have shown impressive growth of 75.7% in the first quarter, being the largest contributor to earnings growth for the S&P 500. The solid trend is likely to continue into the second quarter with expected earnings growth of 121.1%, representing the highest growth.

Top Stocks to Buy

In view of the reasons discussed above, we strongly believe that investors should consider energy stocks. We have highlighted five stocks having a top Zacks Rank #1 (Strong Buy) with a VGM Score of A or B:

GeoPark Ltd (NYSE:GPRK) is an explorer, operator and consolidator of oil and gas. It saw solid earnings estimate revision of 79 cents in two months and has an expected earnings growth rate of 745.16%. GeoPark has a market cap of $959.7 million. You can see the complete list of today’s Zacks #1 Rank stocks here.

HollyFrontier Corporation (NYSE:HFC) is engaged in refining petroleum. It produces and markets gasoline, diesel, jet fuel, asphalt, heavy products and specialty lubricant products. With a market cap of $12.9 billion, the stock saw a whopping earnings estimate revision of $1.31 for this year in the last two months and has an expected growth rate of 102.59%.

Anadarko Petroleum Corporation (NYSE:APC) is one of the world's largest independent oil and gas exploration and production companies. It has a market cap of $36.3 billion and saw robust earnings estimate revision of 96 cents for this year in the last two months with an expected growth rate of 229.6%.

Wildhorse Resource Development Corporation (NYSE:WRD) is an oil and natural gas company focused on the acquisition, exploration, development and production of oil, natural gas and NGL. It saw solid earnings estimate revision of 27 cents in two months and has an expected earnings growth rate of 290.70%. Wildhorse has a market cap of $2.7 billion.

BP (LON:BP) p.l.c. (NYSE:BP) is the holding company of one of the world's largest petroleum and petrochemicals groups. Their main activities are exploration and production of crude oil and natural gas; refining, marketing, supply and transportation; and manufacturing and marketing of petrochemicals. With a market cap of $156.8 billion, the stock saw positive earnings estimate revision of 47 cents for this year in the last two months and has an expected growth rate of 66.49%.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>



HollyFrontier Corporation (HFC): Free Stock Analysis Report

BP p.l.c. (BP): Free Stock Analysis Report

Anadarko Petroleum Corporation (APC): Free Stock Analysis Report

Geopark Ltd (GPRK): Free Stock Analysis Report

Wildhorse Resource Development Corporation (WRD): Free Stock Analysis Report

Original post

Zacks Investment Research
Profit From Oil Bulls With Top-Ranked Energy Stocks
 

Related Articles

Trading Point
Can Anything Stop The Stock Market? By Trading Point  - Nov 26, 2021

Stock markets have gone on an absolute rampage this year. The problem is that the factors that initially fueled this rally - heavy government spending and endless central bank...

Anna Coulling
Is This A Fake Move In U.S. Markets? By Anna Coulling - Nov 26, 2021 5

As US markets open in the midst of the Thanksgiving holiday season, it’s been a traumatic start to the end of the week, with all three indices trading sharply lower, with the Dow...

Profit From Oil Bulls With Top-Ranked Energy Stocks

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email