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Profiting from High Gasoline Prices

Tuesday, 22 May 2007 | 2:48 PM ET

Gasoline prices are soaring -- but one "Morning Call" guest says the best revenge is investing well. Rob Cox, U.S. editor of Breaking Views, joined CNBC's Mark Haines to talk about "the middle squeeze" at the pump -- and how to play it.

Don't Get Mad, Get Rich
Instead of getting angry about gas prices, take advantage of them through your investments. Rob Cox, Breaking Views U.S. editor, shares his energy sector picks with CNBC's Mark Haines.

Cox named integrated oil companies that are "screaming buys." His top pick is Valero--up 49% so far this year--he said it's "still looking cheap" at nine times earnings. He pointed to BP and Royal Dutch as cheaper bargains than most integrated U.S. producers. The editor also praised them for the "downstream aspect": both oil companies also "sell at the pump."

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VLO
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Cox took on fears that gasoline prices will hit consumer spending: He agreed that the "middle squeeze" would hurt Target and Federated Department Stores more than posh retailers like Nordstrom or Tiffany -- but he said he'd go downmarket, not up, and invest in no-frills discounter Big Lots.

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SABIN
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JWN
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TIF
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BIG
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JWN
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TIF
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TGT
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RDSA
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VLO
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