Value Stock Strategist Sees Energy Trade Still In 'Early Innings'
Portfolio Pulse from Erica Kollmann
Energy stocks, led by the energy sector's strong performance in the S&P 500, are in the 'early innings' of a bullish trend, according to Tracey Ryniec, Value Stock Strategist at Zacks. Ryniec anticipates a shift from mega-cap tech to value stocks, including energy, driven by the price of West Texas Intermediate (WTI) crude oil stabilizing between $80 and $90 per barrel. Diamondback Energy, Inc. (FANG) and the SPDR Energy Select Sector Fund ETF (XLE) are highlighted as key assets to watch, with FANG trading at all-time highs and XLE gaining over 13% in Q1 2024.
April 02, 2024 | 8:53 pm
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POSITIVE IMPACT
Diamondback Energy, Inc. (FANG) is highlighted as a key player in the energy sector, trading at all-time highs and valued at around 11 times earnings. The bullish outlook on energy and WTI crude prices supports potential growth.
FANG's position as a relatively inexpensive stock in a sector experiencing a bullish trend, coupled with the stabilization of WTI crude oil prices, suggests potential for continued growth.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
The SPDR Energy Select Sector Fund ETF (XLE) gained over 13% in Q1 2024, with top holdings including Exxon Mobil, Chevron, and ConocoPhillips. The ETF is poised for further growth amid increased demand for oil and gas.
The XLE's significant Q1 gains and its exposure to leading energy companies position it well for further growth, driven by increased oil and gas demand and geopolitical uncertainties.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 85