A fund manager who called $30-a-barrel oil before the crude crash now likes energy stocks — at least, some of them.
In 2015, Mark Yusko, founder and CEO of Morgan Creek Capital Management, predicted crude oil would approach $30 a barrel. Now he is buying stocks of oil exploration and production companies, he told investors at the Morningstar ETF conference Thursday night. But there's one big oil stock in a lot of investor portfolios Yusko won't touch.
"This is the time for cyclicals and energy, but pure energy, not ExxonMobil," said Yusko, who runs the Morgan Creek Tactical Allocation Fund and previously managed the endowment offices of Notre Dame University and the University of North Carolina at Chapel Hill.
Yusko called ExxonMobil "the most dangerous stock on the planet today," and he said part of the blame for making ExxonMobil a dangerous investment lies with ETFs. "It traded for 35 years at a 12 PE [price-to-earnings ratio]. Do you know what the PE is now? Thirty, because all the money has gone into low-volatility ETFs and cap-weighted energy indices ETFs."
ExxonMobil shares are up 14 percent this year, double the S&P 500 performance. Its price to earnings ratio is currently even higher than Yusko said, at 35.