As we've said--OPEC meets tomorrow (threatening production cuts) and U.S. gas inventories are out (down)--as we've been focusing on the global energy picture. But what does it mean for your stock portfolio? Here are some picks from two energy stock analysts on "Morning Call."
Jacques Rousseau is an analyst with FBR. He says it all about being selective right now. James Wicklund is Energy Equity Analyst with Banc of America Securities. He is cautious as well--and we would avoid the energy complex all together for the very near term.
Rousseau says the top idea for Q1 in 2007 is ethanol--specifically VeraSun . On the refining side he likes Holly as it has a lot of internal capital projects that are increasing earnings power. And Rousseau likes ConocoPhillips in big oil. He says they are trading at a discount to their peers. They have suffered from soft gas prices--but Rousseau expects prices to rise next year.
Wicklund likes Halliburton , Schlumberger and FMC Technologies . He says these are his favorite stocks--but he'd wait a couple of weeks to find a lower price to buy them. He points to a problem for energy stocks--natural gas. He pointed out the warm weather in the Northeast--and that means natural gas prices will be down.
Analyst disclosure: Banc of Amercia Securities has or has had an investment and non-investment bank relationship with HAL, FTI and SLB. The firm owns more than 1% of those stocks.