Once upon a time, big tech stocks were all the rage on Wall Street, as investors bid them up to insane heights. For intelligence, the famous pentacle of Facebook (now Meta), Amazon, Apple, Netflix, Google (now Alphabet) At one time accounted for nearly five Standard & Poor’s 500An astonishing number considering the S&P 500 is generally seen as a proxy for the US economy as a whole. In sharp contrast, investors have given the oil and gas sector a wide berth thanks to years of poor shareholder returns, spiraling debt and dwindling profits.
But the tables are now turned, with the bullish Nasdaq down while Oil stocks are the new FAANG: Technology Select Sector SPDR ETF (NYSEARCA: XLK) has crashed 24.3% in the year to date, while its energy peer, SPDR ETF Energy Sector Selection (NYSEARCA: XLE) by 35.9% over the time frame. Thursday, Japan Softbank– The example of the excesses that fueled the boom in technology stocks – it recorded a loss of about 1.71 trillion yen, equivalent to 13.2 billion dollars, for the fiscal year ending in March. that marked Biggest loss ever In the four decades of its existence the largest technology investor in the world.
But energy investors couldn’t be happier, as the black gold rush fueled record profits.
“Given the jump in oil and gas prices this year, it probably wouldn’t surprise anyone that the energy sector is expected to post the largest earnings growth for the first quarter,Wade Fowler, Senior Portfolio Manager at Synovus Trust Company, told CNBC.
Energy stocks currently make up just 4.4% of the S&P 500, a far cry from the 28% tech segment in the market. Power stocks have plenty of room to run to catch up with technology, says Fowler.We’re not suggesting that energy is ripe for a comeback to tech-compatibility as it did in the mid-2000s when commodities skyrocketed after the Dot Com crash, but it’s certainly not impossible either.” said analyst Bespoke.
In fact, for the first time, the world’s most valuable company is an energy company: the market value of Aramco Saudi Arabia, the largest oil company in the world, has overtaken the American company Apple, making the Saudi oil giant the largest company in the world by value. This came after the company’s share rose 46.20 riyals, bringing the market value to 2.464 trillion dollars (9.24 trillion riyals), while the value of Apple reached 2.461 trillion dollars.
But not everything is so smooth on the journey back with oil to the top. The volatility is incredible, and the nearly 10% drop in the sector on Monday means there is a whole lot of short sellers betting on the industry.
Include companies with less than 2% of tradable shares Equinor-ASA (NYSE: EQNR), Shell PLC (NYSE: Shell), total energy (NYSE: TTE), bb . company (NYSE: BP), Exxon Mobil Corporation (NYSE: XOM), EOG . Resources (NYSE: EOG), chevron (NYSE: CVX), and ConocoPhillips (NYSE: COP).
For investors looking for deals, Simon Wong, an analyst at Gabelli Funds in New York, taps into Whiting Petroleum Company.(NYSE: WLL), valaris ltd (NYSE: VAL), And Tidewater Inc. (NYSE: TDW) is now heavily discounted. All three emerged from bankruptcies caused by epidemics.
Here are 5 of the energy stocks with the most short exposure, which means investors should be careful when buying them.
- CNX Resources Corporation
Market value: $3.6 billion
Short interest: 14.3%
Returns to date: 34.1%
CNX Resources Corporation (NYSE: CNX) is an independent natural gas and refining company that acquires, explores, develops and produces natural gas properties in the Appalachian Basin.
The company operates in two segments, shale and coal methane. It produces and sells pipeline quality natural gas primarily to gas wholesalers. The company owns the rights to extract natural gas in Pennsylvania, West Virginia and Ohio from approximately 526,000 net acres; Marcellus Shale; and approximately 610,000 net acres of the Utica Shale, as well as rights to extract natural gas from shale and other shallow oil and gas sites from approximately 1,006,000 net acres in Illinois, Indiana, New York, Ohio, Pennsylvania, Virginia and West Virginia. It also owns rights to coal bed methane (CBM) in Virginia from approximately 282,000 net acres of CBM in Central Appalachia, as well as 1,733,000 net acres of CBM in West Virginia, Pennsylvania, Ohio, Illinois, Indiana, and New Mexico .
- Calon Petroleum Company
Market value: $2.8 billion
Short interest: 14.2%
Yields to date: -16.6%
Calon Petroleum Company (NYSE: CPE) is an independent oil and natural gas company based in Houston, Texas focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas.
As of December 31, 2021, the total estimated net reserves were approximately 484.6 million barrels of oil equivalent, including 290.3 million barrels of oil, 577.3 billion cubic feet of natural gas, and 98.1 million barrels of natural gas liquids. The company was founded in 1950 and is headquartered in Houston, Texas.
Market value: $3.5 billion
Short interest: 13.9%
Earnings to date: 71.2
Based in Frisco, Texas, Comstock Resources, Inc.(NYSE: CRK), an independent energy company, is engaged in the acquisition, exploration, development and production of oil and natural gas primarily in North Louisiana and East Texas, in the United States.
As of December 31, 2021, the company had 6.1 trillion cubic feet of natural gas equivalent in proven reserves. It also owns stakes in 2,557 wells producing oil and natural gas.
- Chesapeake Energy Corporation
Market value: $10.8 billion
Short interest: 13.3%
YTD Yield: 27.4%
Based in Oklahoma City, Oklahoma, Chesapeake Energy Corporation(NASDAQ: CHK) is an independent exploration and production company engaged in the acquisition, exploration and development of properties for the production of oil, natural gas and natural gas liquids from underground reservoirs in the United States.
The Company has interests in natural gas resource plays in the Marcellus Shale in northern Appalachian Basin in Pennsylvania and Haynesville/Bossier Shales in northwestern Louisiana; and the play of fluid-rich resources at the Eagle Ford Shale in southern Texas. As of December 31, 2021, it held interests in approximately 8,200 total production wells, including 6,500 wells with an operating interest and 1,700 wells with higher interest or ownership; Proven reserves are estimated at 661 million barrels of oil equivalent. The company was founded in 1989 and is headquartered in Oklahoma City, Oklahoma.
Market value: $9.6 billion
Short interest: 13.0%
Yield to date: -51.6%
Plug Power Company (NASDAQ:PLUG) is an energy company headquartered in Latham, New York that provides turnkey hydrogen fuel cell solutions for the mobility, material handling, and stationary energy markets in North America and internationally. It focuses on proton exchange membrane (PEM) fuel cells and fuel processing technologies, hybrid fuel cell/battery technologies, as well as green hydrogen and hydrogen generation, storage and distribution infrastructure.
The company offers GenDrive, a hydrogen-fueled PEM fuel cell system that provides power for electric material handling vehicles and GenFuel, a liquid hydrogen fuel delivery, generation, storage and distribution system.
Plug Power supplies its products to retail and manufacturing companies through its direct product sales team, OEMs and dealer networks. It has a strategic partnership with Airbus SE to decarbonize air travel and airport operations with green hydrogen; and Fortescue Future Industries, a manufacturer of electrolyzer technology in Australia.
By Alex Kimani for Oilprice.com
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