Is the crude carnage really over? That’s the question on everyone’s mind ever since the commodity started seesawing around the $50 per barrel.
$80 per Barrel a Reality by 2017 End?
The bullishness was fueled by a Florida-based company in the investment brokerage space, Raymond James Financial, Inc. (RJF - Free Report) , which asserted that this is the beginning of a strong rally. Per the brokerage firm, West Texas Intermediate (WTI) will average $80 per barrel by the end of 2017. Although the broader market is mixed with some in favor and some apprehending another fall again in the near term. But if we see the price trend over the last few months, we can say that the commodity is definitely walking on the bullish path, bouncing off its multi-years lows.
Crude Rally: The Triggers
As of now, the commodity is taking a breather thanks to a host of macro issues round the globe including production disruption in Canada due to the Alberta wildfires, militant attacks and the threat of a nationwide strike in Nigeria, the political rout in Venezuela, and reduced shale production in the U.S. Going by market trends, we believe that given the fact that Saudi Aramco, Saudi Arabia’s state-owned oil and gas entity, is preparing for partial privatization and an initial public offering, the focus on oversupply would be intact.
The WTI crude fell to a 12-year low mark of $26.21 per barrel during mid-February. From there, this commodity is now hovering around $50 per barrel, reflecting a whopping jump of as high as over 90%.
Most importantly, crude has been dictating the overall movement of the market. With the massive crude spike, the market also surged. The Dow Jones Industrial Average (DJI) and the Standard & Poor’s 500 (S&P 500) improved significantly from the Feb 11 level – the day when the Dow plummeted to its lowest level since Feb 6, 2014 and the S&P 500 fell to its lowest level since Apr 11, 2014. Since then, the Dow and the S&P 500 have improved 13.7% and 13.9%, respectively.
Thus we believe that the time has come to choose energy stocks that have solid financials along with a chance to grow significantly in the near future banking on the crude rally.
Top Gainers as Oil Shines Again
With the gradual improvement in oil prices there has been a direct rise in the value of oil stocks. Definitely, this is good news for the debt-laden upstream players as they can now sell the commodity at much higher prices than the prior months. With more probability for exploration and production, there will be more business for the oil pipeline and storage players too. Given this upbeat picture, it will be wise to include energy players with solid fundamentals and financial strength to one’s portfolio. And there will be nothing like it if these energy stocks showcase significant growth potential.
5 Growth Stocks to Bet on
With the help of our new style score system, we have identified five stocks that look great from the growth standpoint. These stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy). It has been noted that stocks with a favorable growth score along with a top Zacks Rank consistently earn superior returns.
Enbridge Inc. (ENB - Free Report) : Calgary, Canada-located Enbridge is an energy transportation and distribution firm with operations mainly in the U.S. and Canada. The company has a Zacks Rank #1 and a Growth score of ‘B’.
EXCO Resources Inc. : The Dallas, TX-based company is primarily involved in the exploitation, production and development of oil and natural gas resources in the U.S. EXCO mainly focuses on shale plays. The upstream firm is braced with a Growth Score of ‘A’ and a Zacks Rank #2.
Baytex Energy Corp. (BTE - Free Report) : The Calgary, Canada-based firm is also involved in the exploration, development and acquisition of oil and gas properties primarily in the U.S. and the Western Sedimentary Basin in Canada. The company has a Growth score of ‘B’ and a Zacks Rank #2.
World Point Terminals LP : The partnership has ownership interest in storage terminals used for storing oil and refined petroleum products in the East Coast, Gulf Coast, and the Midwest areas of the U.S. The partnership sports a Zacks Rank #1 and has a Growth score of ‘B’.
Murphy USA Inc. (MUSA - Free Report) : The El Dorado, AR based company is a retailer of gasoline products and convenience store merchandise primarily in the U.S. The company is braced with a Growth score of ‘B’ and a Zacks Rank #2.
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