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Here's Why Magnolia Oil (MGY) is a Solid Investment Bet Now

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Magnolia Oil & Gas Corporation (MGY - Free Report) has witnessed upward earnings estimate revisions for 2021 and 2022 in the past 30 days. Also, this publicly traded oil and gas exploration and production company’s stock price has surged 55.1% year to date versus the sector’s rise of 22.4%. Currently, the stock sports a Zacks Rank #1 (Strong Buy).

Factors Favoring the Stock

The price of West Texas Intermediate crude, trading at more than $60 per barrel mark, has improved significantly from the negative territory touched in April 2020. The momentum is likely to continue since the coronavirus vaccine rollout will possibly help the economy recover strongly this year, thereby aiding fuel demand.

The rally in oil price has also been supported by OPEC+ (OPEC and its non-OPEC partners) since the cartel and its allies have extended production cut till April. Per the agreement reached on Mar 4, following a meeting through videoconferencing between OPEC led by Saudi Arabia and Russia-led non-OPEC producers, majority of OPEC+ members decided to keep the output unchanged.

Overall, the massive improvement in oil price is definitely a boon for oil explorers and producers and Magnolia Oil & Gas, having a strong footprint in the core of the Eagle Ford Shale and Austin Chalk formations, is well placed to capitalize on the favorable pricing scenario.

Other Stocks to Consider

Other top-ranked players in the energy space include Diamondback Energy, Inc. (FANG - Free Report) , Matador Resources Company (MTDR - Free Report) and Pioneer Natural Resources Company (PXD - Free Report) . All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Diamondback is likely to see earnings growth of 112.5% in 2021.

Matador is likely to see earnings growth of 300% in 2021.

Pioneer Natural is likely to see earnings growth of 429% in 2021.

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