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JPMorgan believes that investors should begin rotating from consumer discretionary stocks into energy stocks.
The firm predicts that the energy sector will be a market leader in 2016.
A combination of falling non-OPEC production and increasing supply could trigger a technical rebound in oil prices in 2016.
In a new report, JPMorgan analyst Dubravko Lakos-Bujas described the firm’s cautiously bullish stance on energy stocks heading into 2016. The report included JPMorgan’s top 15 energy stock picks.
Time For A Change In Leadership
Lakos-Bujas pointed out that consumer discretionary stocks have outperformed energy stocks in each of the last seven years by a total of 260 percent. Macro market trends rarely have lasting endurance, and Lakos-Bujas believes that the time for a leadership change is approaching.
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“Speculative positioning in Energy is already extremely short, and a reversal in technical could provide a significant lift for all assets tied to the energy complex,” he explained.
Energy Upgrade
Earlier this week, JPMorgan upgraded the energy sector to Overweight based on the firm’s belief that energy will be a market leader in 2016. For now, Lakos-Bujas is urging investors to use dips in energy stocks to rotate from consumer discretionary stocks into energy names. JPMorgan predicts that falling non-OPEC supply and improving demand in late-2016 will lead to a shift in oil-related technicals.
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Stock Picks
JPMorgan names the following 15 companies its top stock picks in the energy space:
- Chevron Corporation (NYSE: CVX)
- Occidental Petroleum Corporation (NYSE: OXY)
- Concho Resources Inc (NYSE: CXO)
- Continental Resources, Inc. (NYSE: CLR)
- Devon Energy Corp (NYSE: DVN)
- Noble Energy, Inc. (NYSE: NBL)
- Pioneer Natural Resources (NYSE: PXD)
- Nabors Industries Ltd. (NYSE: NBR)
- Patterson-UTI Energy, Inc. (NASDAQ: PTEN)
- Halliburton Company (NYSE: HAL)
- Schlumberger Limited. (NYSE: SLB)
- Sunoco LP (NYSE: SUN)
- Enterprise Products Partners L.P. (NYSE: EPD)
- EQT Midstream Partners LP (NYSE: EQM)
- Macquarie Infrastructure Corp (NYSE: MIC)
Disclosure: The author owns shares of Schlumberger and Halliburton.
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Concho Resources Inc.
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CODE : CXO |
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ISIN : US20605P1012 |
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Concho Resources is a exploration company based in United states of america. Concho Resources is listed in United States of America. Its market capitalisation is US$ 9.6 billions as of today (€ 7.9 billions). Its stock quote reached its highest recent level on July 05, 2019 at US$ 99.97, and its lowest recent point on January 15, 2021 at US$ 65.60. Concho Resources has 146 059 000 shares outstanding. |