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Amid the Oil Strength since Year-end, Must Own Stocks in a Crude Oil Bull Market

Mar 13, 2019

Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions
Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions

 

  • As a follow up to our blog post yesterday, “From Gusher to Trickle: A Timeline of Saudi Oil Production Cuts” we are highlighting the best stocks in our stock models that will benefit from a rally in crude oil prices.  
     
  • As Saudi Arabia and other OPEC member nations continue to cut crude oil production and squeeze the commodity’s supply, upward pressure is expected to be exerted on crude oil prices. An uptick in crude oil prices is bullish for the names below and is likely to deliver a stronger bottom-line.

Top Buys Poised to Benefit From Higher Oil Prices

Name Ticker Country Sector Industry
Norfolk Southern Corporation NYSE:NSC United States Industrials Railroads
Panhandle Oil and Gas Inc. NYSE:PHX United States Energy Oil and Gas Exploration and Production
Royal Dutch Shell plc ENXTAM:RDSA Netherlands Energy Integrated Oil and Gas
Repsol, S.A. BME:REP Spain Energy Integrated Oil and Gas

Source: Capital IQ

  • Oil hit a low just as 2018 was about to end; since then it has moved higher in a relatively straight line, with WTI crude over 35% higher since then
  • Since that bottom, additional production cuts have been announced by OPEC, propeling the price of crude higher

WTI Crude Price - Last 6 Months

WTI crude

 

  • Investors can play the strength of oil directly via oil companies or indirectly via railroads
    • Railroads are a major shipper of oil in the US where the pipline system, in many areas, are at maximum capacity

 

  • While Royal Dutch Shell (ENXTAM: RDSA) is a major player in the global oil sector, operating in both the upstream and downstream areas, and is based in the Netherlands
     
  • Royal Dutch Shell is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas and “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas.
     
  • Repsol, S.A (BME: REP) is very similar to Royal Dutch Shell in the sense that it maintains operations in both upstream and downstream oil segments and operates globally, and is based in Spain.

 

  • Repsol is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.
     
  • Panhandle Oil and Gas Inc. (PHX) provides horizontal and directional drilling technology to oil and natural gas producing companies in Canada, the US, Albania, and Russia.  Panhandle Oil and Gas also receives a majority of its business from the US (65.6% of top-line revenue in FY2018), meaning increased levels of US crude oil production could result in higher demand from its US-based customers for its services.
     
  • Panhandle was highlighted as a March “Top Buy” stock research report, seen here.  
     
  • Panhandle is rated “Top Buy” in our US Micro-Cap Global Top Stock Ideas.

 

 

Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS