It doesn't take a super-secret report to know that energy stocks have been on fire. Over the past five years, the energy sector has outperformed the S&P 500 by 139 points. However, recent declines in oil prices may be signaling an end to the easy money. Formerly cherished highfliers such as Valero Energy (NYSE:VLO) -- down about 50% year to date -- have fallen hard recently. How can we hope to avoid these kinds of meltdowns?
CAPS Screener to the rescue! Harnessing the power of the Motley Fool CAPS investment community, I screened for companies that investors are bearish on. The following stocks were rated five stars a year ago, but have dropped to three stars or worse since.
|
Company |
Recent Price |
1-Year Return |
CAPS Rating |
|---|---|---|---|
|
EXCO Resources (NYSE:XCO) |
$22.58 |
39.1% |
*** |
|
Kodiak Oil & Gas (AMEX:KOG) |
$2.85 |
(29.6%) |
*** |
|
Linn Energy (NASDAQ:LINE) |
$20.40 |
(35.1%) |
*** |
|
Penn Virginia (NYSE:PVA) |
$61.31 |
54.6% |
** |
|
Petrohawk Energy (NYSE:HK) |
$29.05 |
95.9% |
*** |
Data provided by Motley Fool CAPS and Yahoo! Finance.
Note that this is not a list of companies to buy or sell. In fact, all these companies may turn out to be solid investments.
For instance, CAPS All-Star carbonates recently wrote the following about EXCO Resources: "I see the recent decline in price as a buying opportunity for a company that is in the hottest gas shale play in the US... that I think will benefit from continuing tight energy supplies."
But considering that three-star stocks as a group were flat over CAPS' first 20 months of tracking, while five-star rated stocks trounced the market by 12 points annualized, I'd rather not bet against the wisdom of the Motley Fool CAPS community. Given this, I'd much rather invest in companies like five-star-rated Petroleo Brasileiro (NYSE:PBR) for my energy fix.
Have your own thoughts on which energy stocks are poised to fuel your portfolio? Join our 115,000-member Motley Fool CAPS community and let your voice be heard.
