The energy sector is on pace for its sixth month of losses, which would mark its longest monthly losing streak going back to the creation of the modern sector system in 1999. And some strategists are forecasting further downside ahead for the sector that's tethered closely to oil prices.
Crude has fallen nearly 19 percent so far this year. That's bad news for integrated oil companies like Exxon Mobil and Chevron, which are the sector's largest components.
As oil has dropped, the energy sector's full-year profit expectations have declined as well. The 2017 annual earnings-per-share expectation has declined from about 340 percent at the beginning of the year to about 305 percent year-over-year growth, S&P Global portfolio manager Erin Gibbs pointed out.
"Yes, still big growth numbers coming off of extreme lows, but that's over an 11 percent reduction in 2017 profit expectations. The S&P 500 Energy index has dropped about 15 percent YTD, so we're seeing the index drop more closely tied to the earnings outlook," Gibbs wrote Tuesday in an email to CNBC.
Next year's expected earnings-per-share growth for the sector has held steady at around 44 percent, Gibbs pointed out, but she added that wouldn't anticipate a real turnaround in energy names until oil stabilizes — "and there is no sign of that just yet."
At current levels for oil prices there are some names with potential in the beaten-up energy sector, said Triogem Asset Management managing partner Tim Seymour. Among these names are three large U.S. independent oil and natural gas companies — Texas-based EOG Resources, Oklahoma-based Continental Resources and Texas-based Anadarko.
"I actually don't think there's an enormous amount of value at the current earnings profile ... but those are great balance sheets — great companies that can be opportunistic in this environment," Seymour said Tuesday on CNBC's "Power Lunch."
WTI crude on Tuesday settled about 2 percent higher, at $44.24 per barrel.