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Energy Companies Stage Breakout Despite Lower Oil Prices
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Heading into the third-quarter earnings season, it’s difficult to find a more appealing sector than energy. Even with oil prices on the decline from their March peak, energy companies are still witnessing positive earnings estimate revisions – and their stock prices are reflecting this movement.
The Zacks Oils and Energy sector is the top-ranked sector out of all 16 Zacks Ranked Sectors, and it’s held up very well this year. Not only has the sector widely outperformed, but companies within this sector are relatively undervalued and showing above average projected earnings growth:
Image Source: Zacks Investment Research
There’s an extremely large number of highly-rated stocks (as ranked by our Zacks Rank system) within the energy sector. This serves as yet another confirmation that the energy play may still have more room to run.
For investors looking for more of a diversified, low-risk avenue to gain exposure, the Energy Select Sector SPDR ETF (XLE - Free Report) is a Zacks Rank #1 (Strong Buy) and has handily beaten the market this year. The Energy Select Sector SPDR Fund seeks to provide investment results that generally correspond to the price and yield performance of the Energy Select Sector Index.
The companies within XLE provide services in the oil, gas and consumable fuel, and energy equipment industries. XLE is up more than 62% this year, and is knocking on the door of the June high:
Image Source: StockCharts
One company within the XLE ETF is currently breaking out to 52-week highs – a big sign of strength. This company is part of the Zacks Oil and Gas – Integrated – United States industry, which currently ranks in the top 30% out of approximately 250 industries. This group has soared more than 80% this year while the market has been in correction mode.
By focusing on stocks within the top Zacks Ranked Industries, we can provide a constant ‘tailwind’ to our investing success. Let’s take a look at a leading stock within this powerful sector and industry combination.
Hess Corp. is an exploration and production company that develops, produces, transports, and sells crude oil and natural gas. HES operates primarily in the U.S., Guyana, Malaysia, and Canada. The company also provides water handling services in the Williston Basin area of North Dakota. Hess Corp. was incorporated in 1920 and is based in New York, NY.
HES has exceeded earnings estimates in three of the past four quarters, producing an average earnings beat of 7.08% over that timeframe. The commodity exploration company most recently reported Q2 EPS back in July of $2.15/share, a 3.86% surprise over the $2.07 consensus estimate. The stock is up nearly 86% this year alone.
Image Source: Zacks Investment Research
HES is set to report Q3 results on Wednesday before the market open. Analysts are projecting earnings to have grown an incredible 628.57% in the third quarter to $2.04/share, with revenues seen climbing 62.31% to $2.94 billion.
Make sure to keep an eye on HES as well as well as the energy sector during this difficult market period.
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Energy Companies Stage Breakout Despite Lower Oil Prices
Heading into the third-quarter earnings season, it’s difficult to find a more appealing sector than energy. Even with oil prices on the decline from their March peak, energy companies are still witnessing positive earnings estimate revisions – and their stock prices are reflecting this movement.
The Zacks Oils and Energy sector is the top-ranked sector out of all 16 Zacks Ranked Sectors, and it’s held up very well this year. Not only has the sector widely outperformed, but companies within this sector are relatively undervalued and showing above average projected earnings growth:
Image Source: Zacks Investment Research
There’s an extremely large number of highly-rated stocks (as ranked by our Zacks Rank system) within the energy sector. This serves as yet another confirmation that the energy play may still have more room to run.
For investors looking for more of a diversified, low-risk avenue to gain exposure, the Energy Select Sector SPDR ETF (XLE - Free Report) is a Zacks Rank #1 (Strong Buy) and has handily beaten the market this year. The Energy Select Sector SPDR Fund seeks to provide investment results that generally correspond to the price and yield performance of the Energy Select Sector Index.
The companies within XLE provide services in the oil, gas and consumable fuel, and energy equipment industries. XLE is up more than 62% this year, and is knocking on the door of the June high:
Image Source: StockCharts
One company within the XLE ETF is currently breaking out to 52-week highs – a big sign of strength. This company is part of the Zacks Oil and Gas – Integrated – United States industry, which currently ranks in the top 30% out of approximately 250 industries. This group has soared more than 80% this year while the market has been in correction mode.
By focusing on stocks within the top Zacks Ranked Industries, we can provide a constant ‘tailwind’ to our investing success. Let’s take a look at a leading stock within this powerful sector and industry combination.
Hess Corporation (HES - Free Report)
Hess Corp. is an exploration and production company that develops, produces, transports, and sells crude oil and natural gas. HES operates primarily in the U.S., Guyana, Malaysia, and Canada. The company also provides water handling services in the Williston Basin area of North Dakota. Hess Corp. was incorporated in 1920 and is based in New York, NY.
HES has exceeded earnings estimates in three of the past four quarters, producing an average earnings beat of 7.08% over that timeframe. The commodity exploration company most recently reported Q2 EPS back in July of $2.15/share, a 3.86% surprise over the $2.07 consensus estimate. The stock is up nearly 86% this year alone.
Image Source: Zacks Investment Research
HES is set to report Q3 results on Wednesday before the market open. Analysts are projecting earnings to have grown an incredible 628.57% in the third quarter to $2.04/share, with revenues seen climbing 62.31% to $2.94 billion.
Make sure to keep an eye on HES as well as well as the energy sector during this difficult market period.