Market Overview

Goldman Sachs' Top 9 Energy Stocks To Buy

Goldman Sachs' Top 9 Energy Stocks To Buy

Last week’s OPEC meeting was seemingly ordinary, which is exactly what many Wall Street analysts were hoping for. Global oil market fundamentals have been improving, and Goldman Sachs analyst Brian Kinsella sees plenty of buying opportunities in the Energy sector now that the OPEC meeting risk is out of the way.

Kinsella believes that natural gas plays, which have already benefitted from a 15 percent surge in Henry Hub prices due to warmer-than-expected weather forecasts, have more upside potential in the near future.

“The pain trade is likely higher for gassy E&Ps—given still elevated short interest on a ‘days to cover’ basis—if gas prices continue to grind higher, despite valuations largely reflecting the natural gas strip,” he explains.

Kinsella also mentions that mutual funds have been significantly increasing their exposure to the Energy sector, with both large-cap growth funds and small-cap core funds now overweight energy versus their respective benchmarks.

So far this year the Energy Select Sector SPDR (ETF) (NYSE: XLE) is up 12.2 percent versus only a 3.5 percent gain for the SPDR S&P 500 ETF Trust (NYSE: SPY).

Goldman currently has the following nine Energy stocks on its Conviction Buy list:

Exxon Mobil Corporation (NYSE: XOM)

Cenovus Energy Inc (USA) (NYSE: CVE)

Hess Corp. (NYSE: HES)

Diamondback Energy Inc (NASDAQ: FANG)


EOG Resources Inc (NYSE: EOG)

Schlumberger Limited. (NYSE: SLB)

Sempra Energy (NYSE: SRE)

NextEra Energy Inc (NYSE: NEE)

Disclosure: the author is long SLB.


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