This has got to be my favorite part, where the pundits, bank analysts and columnists start to (quietly) revise their views on the oil markets.
One after one, they’re losing their pessimistic views on oil and realizing what we’ve known for the last year: Oil is at the beginnings of another real price boom. Some are even mentioning (heavens!) $100 oil.
So, the analysts are finally catching up. What does that mean for us?
As an investor, if you’re going to take the best advantage of this rally and coming boom, the point is you need to get smarter as the analysts catch up with you. We’ve made solid gains concentrating on U.S. independent E+P’s – names like Hess (HES), SM Energy (SM) and Centennial Resources (CDEV). Now, we’ve got to race further ahead, concentrating on secondary names that the analysts will again be slow in figuring out. Every time we stay ahead of the other guys, we’ll be first at the table as the meal is just served, and not coming late, picking over the leftovers.
That’s why I’m getting excited about lagging oil services companies. They’ve had perhaps an even more difficult time in the last four years, not only losing work in the field but being forced to slash their prices across the board. Consequently, oil services stocks have, if anything, even worse looking profiles (and charts) than most of their E+P company clients. But there are indications that they are about…