Riding the Waves of Change
About four years ago, in the tumult of the COVID-19 outbreak, U.S. crude oil prices plummeted to an unprecedented zero. Since then, a staggering revival has taken place, propelling oil prices to new heights. The U.S. Oil Fund ETF (USO) has surged over 400%, driven by a mix of escalating demand, strategic OPEC cuts, and geopolitical tensions. While energy stocks have made remarkable progress, the journey is far from over.
A Shift in the Investment Landscape
Last week, the market sent a resounding message as investors pivoted from high-flying tech stocks to the steadier domain of “old economy” stocks. For instance, while the Nasdaq 100 ETF (QQQ) took a substantial 5% hit, the Dow Jones Industrial ETF (DIA) remained relatively stable.
Global Tensions Ignite Opportunities
The geopolitical stage has been set ablaze with the ongoing conflict between Russia and Ukraine, which shows no signs of resolution. Recent approvals of significant foreign aid by the U.S. House of Representatives, primarily aimed at Ukraine and Israel, suggest a protracted struggle. Simultaneously, escalating tensions between Israel and Iran are adding fuel to the fire, underscoring the stability of oil prices.
Seizing the Moment for Reversion to the Mean
The United Natural Gas Fund (UNG) has witnessed a nearly 50% decline over the past year. However, a bullish divergence highlighted by the Relative Strength Indicator (RSI) indicates a potential upswing. The anticipation of a resurgence in Natural Gas could serve as a lucrative opportunity for energy firms with natural gas operations.
Stock Picks for the Astute Investor
Here are three energy stocks to consider before their earnings report:
Exxon Mobil (XOM): EPS Due April 26th
XOM stands out as a premier energy player poised to benefit from its attractive valuation metrics. With a forward P/E ratio of just 12.16x compared to the S&P 500’s 20.13x, XOM presents an enticing opportunity. Moreover, the active trading of out-of-the-money call options for September and October reflects investor confidence. Enhanced operational efficiencies from its Pioneer acquisition and promising discoveries like Guyana position XOM for robust growth.
Occidental Petroleum (OXY): EPS Due May 7th
As a value-oriented choice, Occidental Petroleum’s allure is further validated by Warren Buffet’s Berkshire Hathaway holding a substantial 30% stake in the company. With a solid balance sheet and consistent asset growth, OXY embodies a secure investment backed by Buffett’s renowned investment acumen.
Antero Resources (AR): EPS Due April 24th
For investors eyeing a natural gas resurgence play, AR presents a compelling opportunity. Despite the downtrend in natural gas prices, AR demonstrated an 82% EPS growth last quarter. Bolstered by a Zacks Rank #3 (Hold) and a positive ESP score, AR is primed to surpass Wall Street’s expectations.
Where Will Stocks Go…
If Biden Wins? If Trump Wins?
The answers might just surprise you. Since 1950, the market has exhibited a relentless upward trend even after negative midterm years. The vibrancy and engagement of voters have historically driven a bullish market phenomenon.
The Unstoppable Rise of Stocks For Every Political Stripes
Shining in the Political Arena
Amid the wave of political uncertainties sweeping across the land, investors are seeking solace in the unlikeliest of places – the stock market. And, surprising though it may seem, there exist stocks that promise gains regardless of which party emerges victorious in the political fray.
1. The Medical Marvel’s Meteoric Ascent
A medical manufacturer has defied the odds, soaring an astonishing 11,000% over the course of 15 years. A testament to resilience and innovation, this stock stands out as a beacon of hope for investors seeking stability and growth.
2. The Rental Royalty
While the economic landscape may seem tumultuous, one rental company is carving out its path to success by outperforming its sector peers. With steadfast determination and strategic maneuvers, this company is proving that it takes more than just luck to thrive.
3. Energizing Portfolios with Power
Amid talks of energy transitions and sustainability, an energy powerhouse is making waves with plans to boost its already substantial dividend by an impressive 25%. In a world where stability is a prized commodity, this stock offers investors a chance to fortify their portfolios.
4. Reaching New Heights in Aerospace and Defense
Amid global uncertainties and shifting geopolitical dynamics, an aerospace and defense standout has clinched a potentially game-changing $80 billion contract. As the industry navigates choppy waters, this company’s success serves as a testament to resilience and adaptability.
5. Chipmaker’s Monumental American Pursuit
On the horizon, a giant chipmaker is betting big on the U.S. by constructing massive plants. As the technology sector continues to evolve, this company’s strategic investments symbolize a commitment to growth and innovation, regardless of the political tides.