Energy could be next to jump
The group just seems right for rotation and appreciation.
Who will be next to levitate? Perhaps the oils? This group's actually done pretty much nothing this year.
You've got high-quality stocks like Schlumberger (SLB) only up 7% and National Oilwell Varco (NOV) down 4.5%. Exxon's (XOM) only up 2% and ConocoPhillips (COP) is up just 4% and BP (BP), even after that great quarter, is up only a similar amount. And every time the futures are down people bang the stocks down, even as that's proven to be a sucker's bet if you look at how the individual stocks are trading because, in reality, Brent's still higher than $100 and that's the only benchmark that matters.
How long can this underperformance last if the dollar stays weak -- still lots of hedge funds doing that trade -- and natural gas doesn't go back to below $3.50, the level where profits start getting crimped? How long can it last if we keep getting a bounce in oil at the $93 level here and $102 over there, even as today it is a tad weaker, on news that the Saudis are upping their production?
The group's more bifurcated than it used to be because of the activism component. For example, I think that Hess (HES) could still be very much in play as it tries to defend itself against Elliott Management in the May 16 board proxy vote. Elliott has truly traced out some of the problems Hess has and I have to admit I am dumbstruck at how poorly Hess has been run. I think the company's worth a great deal more than it is selling for.
It's the same with Occidental (OXY). I know there are those who are circling OXY, but the main thing is that it is ripe for the kinds of split-ups we have seen that sever refining and marketing from production. Plus, it has a fabulous chemical division. Of course, two months ago you couldn't give this one away after the company said that production wasn't coming through, but that's all been forgiven after the last earnings report and I think the break-up could be an event worth holding out for.
In the meantime, you can just own some slower growers like Conoco, with those fabulous nat gas holdings, or Chevron (CVX), with terrific Gulf of Mexico properties. Risk takers can plow into BP with calls. What a terrific quarter it had and if it weren't for the Macondo lawsuit I think this one would have gone right to $50.
Two others make sense to me: Ensco (ESV), with that newly-fattened dividend, and Linn Energy (LINE), which is acquiring Berry Pete and will have some terrific properties out West, where oil and gas are scarce.
After all, we have seen happening these days, the group just seems right for rotation and appreciation. Only Exxon seems, at least to me, an unlikely candidate for price appreciation, but if the whole group moves, of course, it will move, too. Oh, and don't forget to look at my videos with Dan Dicker on Wednesday, including some on other plays in the Gulf of Mexico as well as Noble's (NE) prospects in the Middle East.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long LINE, OXY and COP.
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It's a riot to read V_L's rants.
Round up the bankers, CEO's, Stock market grubbers, Rich inheritors..... bla bla bla and put them in Guantanamo lockup. We all know you're not talking about you doing this yourself because you rant and rave for gun control. The only reasonable explanation is that you expected Obama to do these things for you. It must be pretty rough on you to realize Obama is no different than the other political crooks.
You don't need to buy into Cramer's arguments. Skip the producers, it's the pipeline owners who will make you money day in and day out. MLPLs provide me with a good steady income, and some of the highest dividends around.
I love listening to all the negativity from a few posters here who aren't smart enough to make money in the market. Makes me feel so superior. LOL! Keep bashing, guys, I need my daily laugh. Lot's of us are making serious money.
BTW, only a complete moron would think there is any chance of abolishing the Fed, or closing the banks.
Very True...G-Man.....Us "pipeliners" don't care about the price of product..
As long as it keeps transporting through the lines.
And it does, with more demand every year..
They can't do "build-outs" quick enough..
And owning pipelines...Is a "TERRIFIC" long term investment...
Conoco has been good to me.
Happy May Day. I hope we don't have to leave work early because of the marches and protests.
This article is about Energy, Oil and Ngas....Did I miss something.??
Or DID EVERYONE else..??
I swear to the gods.....NOTHING about jobs recovery, nor QE anything..?
Not even anything about a Summer of Recovery, nor Obama..
Just about Energy and the Companies that supply some of it...
Energy....Oil and other fuels have been going up nicely...
Even OUR Coal has had a tremendous recovery and upsurge; Since the EPA indictives about a year or so ago....?
About ConocoP(COP) it's up 5.6% since purchase a week or so ago..
All Energy Equities start climbing on a "smell of a better recovery."
Or maybe the hint of more usage in the coming summer and tourist/vacation season.
I'm just wondering how Fat Azz, err Mr. Fat Azz, can get 3 thumbs up for calling all posters morons.
What do you do Fatty give yourself a thumbs up ??
And then make or coerce Mr. Brucey into doing the same, or where does he put his thumb..?
We need Jeb Bush!2 more unfunded wars, a market crash, plenty of hate,
no healthcare, less education and more scandals.Sounds great to me !
Barry, some of us are rich, thanks to Obama`s stock market.Something you don`t
know about.I can go golfing 12 months a year.Try doing that in rat infested NY.
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