Barron's Recap (8/4/12): How to Play Energy Now

This weekend in

online: the prospects for the oil and gas sector, the case for Activision, a look at Baltimore, profiles, interviews, book reviews and more.

"

" by Andrew Bary. The bull case on the oil sector has long been that demand from emerging markets would outstrip supply. However, softness in the global economy has now put that on hold. As the supply of oil has grown faster than demand, energy stocks in the S&P 500 index are up only 1%, compared with a 10% gain for the index overall. And second-quarter profits are down about 15%. But this has created opportunities for investors. Chevron

, Exxon Mobil

, Royal Dutch Shell

and Total

have appealing P/Es and carry dividend yields of more than 2.7%. Exploration and production companies like Apache

, Anadarko Petroleum

, and Hess

appear to be undervalued. The article also looks at oil service stocks, oil refiners, sector ETFs and much more. The world will be heavily dependent on oil and gas for decades, which should provide plenty of profits for a range of companies in a still-growing industry.

"Why Activision May Come Roaring Back" by Sandra Ward suggests that the stock of computer and online game maker Activision Blizzard

should soon benefit from a new game and a partnership in the booming China market. In "The Naked Truth?" Gary Weiss says that a failed naked-shorting lawsuit lodged against all of the major Wall Street prime brokers, including units of Goldman Sachs

and Merrill Lynch, by Overstock.com

has raised intriguing issues. Hedge-fund chief Pierre Lagrange wants the eurozone to guarantee troubled member nations' bonds, says "Blueprint for the Euro Zone" by Leslie P. Norton. But those nations must hew to budget- and debt-reduction targets. Richard C. Morais's "An Easy Getaway with Great Eats" features Baltimore, home of elegant neighborhoods, gourmet restaurants and fine accommodations, as well as being the setting for the gritty television program "The Wire." "Cool Head, Big Heart" by Alexander Eule offers advice from Mary Deatherage of Morgan Stanley Smith Barney, who is investing in solutions to the world's water shortage. Christopher C. Williams's "Happily Stuck in the Middle" is a profile of Steven Pollack of the John Hancock Disciplined Value Mid-Cap Fund, a bottom-up investor who has his eye on CBS

and Seagate Technology

. In "Three Stocks to Buy, Two to Avoid," Leslie P. Norton interviews value investor Bruce Geller, who likes Chico's FAS

and two others, but he is no fan of Fifth & Pacific

or Ctrip.com

. Books by Paul Krugman on our current "depression," Charles Murray on class frictions and Jack Schwager on lessons learned from hedge funds are featured in "This Month's Book Reviews." "American Hero" is an editorial commentary about legendary economist Milton Friedman by Thomas G. Donlan.

Columns in this weekend's

discuss: