Investors might consider putting their money to work in a lagging part of the market.
According to Jan van Eck, CEO of VanEck, oil stocks are reeling.
“The [oil] the supply is there. The companies are arguably the second best cash flow companies [compared to] The semiconductor” he told CNBC’s “ETF Edge” this week. “They trade at double-digit cash flow yields for E&Ps.” [exploration and production] and sectors in the oil market. Nobody cares. Nobody cares.”
His company runs it VanEck Oil Services ETF. As of January 31, FactSet shows the ETF has the largest holdings Schlumberger, Halliburton And Baker Hughes.
The ETF is down nearly 7% so far this year, and over the past 52 weeks it has fallen more than 9%. So far this year the S&P 500 is up more than 5% so far this year.
“It is [energy] “In many other things we fell short of expectations, but not really bad considering that the driver of global growth is really down at the moment and may last for a few more years,” van Eck said.
Todd Sohn from Strategas also describes oil stocks as unloved and sees potential for a turnaround.
“They had some pretty big outflows last year. And if the tech industry were to take a hit at some point this quarter, I would suspect that the more tactical people would move into things like this energy or Healthcare“said the firm’s ETF and technical strategist.
WTI crude oil just had its best weekly performance since September and posted most of its yearly gains this week. The commodity rose 6% to close at $76.84 a barrel.
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2024-02-10 16:00:01
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