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Buying Opportunity in Energy: Expert

S&P 500 Energy Names not in Peril

Energy may currently be one of the most battered and beaten down sectors, but that's not stopping one fund manager from finding value. Aureus Asset Management's Karen Firestone believes the only risk right now is not buying the sector. The Halftime Report experts debated whether there is gain--or more pain--on the horizon.

Firestone believes that there is value in certain names within the energy sector. Specifically, she's watching Schlumberger. She notes that it is "more broadly diversified" than some of its competitors, and that "it will be less affected if the price [of oil] goes down."

Joe Terranova agrees, adding that investors should look at the "best in breed names: Exxon, Schlumberger, Occidental Petroleum...Pioneer Natural Resources, EOG [and] Concho Resources." Since these names are positive for the year, Terranova thinks they're better bets than the cheaper, but highly leveraged beaten-down names.

Heavyweights in the industry Howard Marks and John Paulson are currently buying distressed credit, Jon Najarian notes. "Stronger hands and fresh money" could be signs of a coming turnaround.

But Josh Brown isn't so sure--he thinks we could see more downside ahead. "Buying distressed credit of energy producers is not a vote of confidence in the equity side," he argues. Recent buying should not be viewed as a sign that the worst is over. Rather, it gives investors options, so that "when the waves of bankruptcies come...they'll be the new shareholders in debt-free companies."

Trader disclosure: On February 17, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Halftime Report" were owned by the "Halftime Report" traders:

Pete Najarian: Long AAPL, BAC, BKE, BMY, DIS, DISCA, GE,KMI, KO, MRK, PEP, PFE, VIAB. Long calls AA, AAL, AMJ, BAC, BHP, BX, CHS,DAL, DATA, EBAY, EEM, GDX, HAIN, HBAN, LB, LC, MCD, MSFT, MT, MTG, NRF, SLV,SWN, UAL, WEN, WMB, WYNN, YDKN, ZIOP. Long puts DB, EWH, FCX, MRO, MS,RIG, VLO.

Jon Najarian: Long ABX, DISC, GDX, GDXJ, SCTY. Long calls BWLD, FOLD, HOG, JNJ, KATE, KRE, IP, MCD, MDLZ, MSFT, MYL, NEM, NBR, OAS, RCL,STO, SWHC.

Josh Brown: Long AAPL, BABA, DE, DNKN, JMBA, LOW, LNKD,SAM, SHAK, SPWR, TWTR, XLE, XON.

Joe Terranova: Long VRTS.