Has the huge drop in oil prices and oil stocks provided an opportunity for value investors to scoop up some of the best oil stocks?
The price of oil has plummeted over the last two years. The year 2015 was the second straight year that oil was one of the worst performing commodities in the market. After falling more than $100 in 2014 (roughly 66 %), oil lost another 30 % in 2015.
Not surprisingly, the prices of oil stocks have plummeted along with the price of oil. For the year 2015, stocks in the oil industry were some of the worst performing stocks of all the roughly 2,000 stocks we cover. While the average stock was down by about 15 percent, the average oil stock was down by significantly more than 15 percent.
|Industry||Average % change in Price (Year 2015)|
Oil & Gas – Integrated
|Oil & Gas Operations||-26.5|
|Oil Well Services Operations||
Oil is cheap. Oil stocks are cheap. Is there any place for oil and oil stocks to go but up?
Unfortunately, in our opinion, the industry (in general) should still be avoided. The outlook for the industry is justifiably unfavorable, or at least murky. There are better bargains elsewhere.
But true to our bottom-up mentality, we don’t feel this way for each and every oil stock in the market. In an industry as big and important as the oil industry, there are always a few good players.
If you would like to balance out your portfolio with a few good oil stocks, click the link below and scroll down to the link “Best Oil Stocks to Buy Now” to see our highest-rated oil stocks. These are the oil companies whose financials are solid and whose future looks at least above average.