The Energy Sector’s Primed for a Comeback

While the markets as a whole might not be bullish and investors should still be careful about what they invest in it doesn’t mean there aren’t good picks out there.  In times like this when the markets aren’t bullish, investors need to learn to be opportunistic. 

Look for strong sub sectors that are thriving or sectors that have been hit hard primed for a rebound.  We believe the energy sector is primed for a comeback. While many energy stocks across the board have been hit hard it doesn’t mean that business is bad, just the price of oil fluctuates and took a little dip. 

Oil companies in the meantime have still been drilling as the price of oil dropping to expensive from exuberantly expensive doesn’t affect their production. As a result, this week we plan on showing you where to put your money and which energy plays are best and primed for great success.  Stay tuned and be excited for what we have in store!

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2011 Outlook: My Regional & Sector Picks

Markets don’t move on good or bad.  Markets move on better or worse. Things are slowly getting better, they’re still not good, but they’re getting better.  Things always have to get better before we get good.  Increased visibility should allow equities to do well in 2011.  European growth will slow next year, but the corporate part of the economy is still in pretty good health.  From my viewpoint, all signs point to a steady comeback in 2011.

Goldman Sachs just came out with their forecasts for 2011 and 2012.  They see the U.S. recovery picking up steam and raised their 2011 forecast for U.S. growth to 2.7% from 1.9% which puts Goldman’s GDP forecast above the Wall Street consensus for the first time in 5 years.

Here are the regions and sectors I like for 2011:

Regions: Global Emerging Markets. I like the growth story and the valuation story.  I’m neutral on U.S., underweight on U.K. and Europe.  I especially like the China/Shanghai composite (.SSEC), the Brazilian Bovespa (.BVSP) – followed by Turkey, Chile and Vietnam.

For a short-term play, I like Japan’s Nikkei 225 (.N225). Japan will start to appear on more analysts buy lists and should do better now, especially as the Yen is starting to weaken up a bit.  But Japan is more of a tactical position for the next 3-6 mo., but not for a year or more.  Japan is not yet a long-term play because underlying profitability in Japan is still too low and until there’s a sign they can get out of deflation in Japan, it will be a tough long-term investment option.

Sectors:  Tech, Energy & Materials, Health Care, Cyclical names that have lagged.

Happy investing for 2011!

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Sweet Spots for Energy Stocks

Don’t be a stranger leave a comment below and let me know what you think or send them to my Twitter. Also remember to sign up for Stocks on Wall Street’s Monthly Newsletter.

Status/Class/Tacky Stock Picks – Energy, Finance, Industrial/Mining Sectors

I introduced this ‘game’ in a previous posting.  Here’s the first in what will be a recurring series using the theme, ‘Status/Class/Tacky Stock Picks’.  This one covers my picks in the Energy, Finance and Industrials/Mining sectors. Remember, everything around us can fit into a category of Status, Class or Tacky.  Status = trendy, latest fashion; can be the best, but not necessarily; sometimes over-rated.  What’s currently in vogue is key factor here, not objective quality – which may not make for a great stock pick.  Class = excellent; not necessarily most fancy; more often than not it’s better than ‘status’, but more conservative.  Tacky = needs no explanation.

Comments:

Energy

- Alternative Energy:  solar (ICLN), wind (PWND), green energy (TAN).  More hype, more of a cause than an investment.  Realists know alternative energies will remain a marginal share of total energy delivery for quite some time.

- Noble Energy (NE) – ignored by media, margins best in class, steady dividend payer

- Petrobras (PBR) – what’s not to like?  Brazil, rising oil prices, best-managed co. in Latin America, new oil reserve finds.

- Exxon-Mobil (XOM) – solid, poised to rally to $80-85 by end of 2010

- LDK Solar (LDK) – as if investing in solar isn’t bad enough, how about a Chinese solar play for volatility?  This is at best a curious speculative play.

Finance

- Citibank (C) – strong performer, roller coaster chart, but still on track for $5+

- Goldman Sachs (GS) – down, but not out.  In spite of systematic demonizing by Obama & Co., this is still the world’s best-run financial services organization.  If you have a mid-to-long-term view, this is a buy.

- American International Group (AIG) and Premierwest Bancorp (PRWT) – their weak performance speaks volumes.

Industrials/Mining

- Caterpillar (CAT) – on everyone’s list.  Will continue to outperform

- Joy Global (JOYG) – can there be more growth after +160% run over past year/+45% since mid-Feb.?  You bet.  This mining equipment specialist is positioned to continue its run in this ongoing, multi-yr, secular bull market in mined commodities.  Ditto for Bucyrus (BUCY)

- Manitowoc (MTW) — some are touting this as a home run trade and it’s up 18% in past few weeks.  Maybe.  But I’m still dubious and prefer to invest in better options.

March to be a Bullish Rally for Energy Sector

To support my article I wrote the other day, Oil Consumption to Rise: Invest in Oil I have some graphs that I came across that will historically help point to why the energy sector is going to thrive within the month of March.  Check out the graphs below:

Looks good for Oil Stocks

Solid projections for Natural Gas

Finally good for Refiners as well

History usually tends to repeat itself and I see no reason why March will not live up to the expectations.  I think the energy stocks will perform well in March so keep invested within this sector.  Leave me a comment on what you think will happen within the energy sector in March.