Energy and Power are probably the only areas that will have earnings growth above 30%. Looking at the recent sell-off in Natural gas, and the OSX you have to wonder on a risk to reward model whether this is THE BEST PLAY for the next 3-6 months.
I like the current OSX stocks: SLB, ESV, APA, BJS, HAL, and GLM. Crude will hold 24BBl and at that level these stocks could be at their lowest point in the next 1-2 YEARS!!
I actually am VERY SURPRISED that many OSX did not FLY as they did in the last cycle when Crude hit 23-26 BBL. It looks like a lag that will catch up in the next 6 months.
I like the power producers and builders; EME, CPN, ACI, ILA, AES, DYN, and ORN.
I see no validity to any claims we are entering a GLUT. If you take the inventories and power abilities of our regions in the US you will notice we are on a very, very short inventory addition schedule. The last 6 weeks are not enough, and you must look at the last 1-3 years inventory levels. |
