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Investors overlooking a 'stealth bull market': Pro

Trading energy's stealth rally

The energy sector's rally has been largely overlooked by investors—and it has room to run, Invesco senior portfolio manager Ron Sloan said Monday.

"I think that we've had this stealth bull market in energy land," he said. "Everyone's talking about the great earnings handoff that's required this year from a macro standpoint, and that's going to demand basically cyclicality in your portfolio. And I think the least discounted, the most overlooked part of the cyclical economy is energy.

Sloan, who oversees $21 billion in assets, is also CIO of Invesco's Global Core Equity team.

On CNBC's "Halftime Report," he noted that energy accounted for 10 percent of the companies in the S&P 500, adding, "I think you can easily be 'overweight' energy at this level of weighting and do just fine."

Sloan's top energy plays are EOG Resources, Pioneer Natural Resources and Anadarko, all of which Invesco owns.

Anadarko, which earlier this month settled a lawsuit for $5.15 billion over the improper spinoff of Tronox, could grow an additional 30 to 40 percent "just to get to fair value," he added.

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Sloan also liked select names in the oil-services sector, noting that Invesco also owned shares of Halliburton and Weatherford.

"If we have a cap ex story this across America, guess what, a third of it has to come from energy," he said.

Sloan added that crude oil above $100 per barrel would continue to provide support for infrastructure names and expected continued demand globally.

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"In aggregate, most people do a great job of counting production but don't do a particularly great job of counting where the demand is coming from, i.e., the emerging world," he said. "I don't know that we've got a lot of this downside that many, many strategists are looking for in crude."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.