Reply To: Traders Market Weekly: When Logic Hits You in The Face


Barron’s mentions:

The publication makes the case that energy stocks have more room to rise, especially for investors willing to mix it up with renewables-focused companies. Energy is noted to still be the cheapest sector in the S&P 500, trading at 9.8X expected earnings over the next year. Another positive identified is that balance sheets in the sector are healthier than they’ve been in years.

Politics are also working in favor of energy stocks, with the reality of soaring gasoline prices increasing tolerance for traditional energy sources. Energy is also seen as due for a major investment cycle. Goldman Sachs noted that capital expenditure in oil and gas production has fallen 61% since peaking in 2014, and overall primary energy investment has dropped 35%.

That means the three years could see a major rebound as producers ramp up supply to meet demand, and companies in sectors facing severe capacity constraints could see a boost. The six energy stocks that made the cut were EOG Resource (EOG), Enel (OTCPK:ENLAY), Phillips 66 (PSX), Sunrun (RUN), Shell plc (SHEL), Liberty Energy (LBRT).