Plain and simple – successful investing involves buying low and selling high all of us probably know this single most important rule. If you happen to be real contrarian like me, buy a company that’s in this sector as no one likes oil. Oil has fallen more than 60% and threatening at irregular intervals to keep declining, without doubt there’s blood on the streets – with investors fleeing the sector and capex budgets at oil companies being slashed.
Although its peak season for oil buying, Morgan Stanley’s Adam Longson writes on his blog, that there are lots of tankers full of oil – deskbound in the Atlantic Basin still waiting to be vended. He writes that the future of the oil prices is bleak if there is this many challenged cargoes, in this high demand setup – this is indeed worrying.
It’s not at all pretty with the sector, I must say that the fuse on this oil bonanza is burning down as I write this – fortunes could be made in such a scenario. One of the strongest uptrends in the sector seems to be gaining ground, and its imminent – is certainly not a question of how – it’s only about when thus making some investors lots of money.
Supplies are bought only after floating for three months in storage, in spite of all the bearish news, there are still plenty of profitable gems in the oil sector. As you know, a market setback gives prudent investors time to buy. If you’re following my blog, you could be one of the many, and if you happen to be waiting on the sidelines, don’t wait any longer look out for these three stocks as a market rebound is presently on the cards.
My first favorite is a transporter of oil Enbridge Energy Partners LP (NYSE: EEP) it transports from western Canada and the Bakken formation. It’s a MLP that accounts for 17% of total U.S. oil imports. The stock is quite consistent, has rebounded 32% in the last year while its peers have fallen. And its most appealing factor is its dividend which is quite characteristic of an MLP for those of you who are interested to know more about MLP’s here’s the link.
The second favorite is Royal Dutch Shell Plc. A Netherlands based multinational oil company that produces about 3 million barrels a day, one of the largest companies by revenue. Have operations in all three segments of the production process, offers an impressive 6.12% yield it’s a solid dividend play for the imminent rebound that is on the cards.
And the third favorite stock is the Bankers Petroleum BNKJF on the pink sheets a company with huge fields in Albania consistently climbing revenues and earnings what could go wrong of course except the prevalent oil prices scenario that is not going to last for a few months. Although it’s hard to base on the glorious past – Bankers Petroleum made fortunes for the investors in the later part of year 2000 as they discovered some huge oil fields in Albania. BNKJF is still a gem of an investment.
Disclosure I don’t have any positions in any stocks mentioned herein and no plans to initiate any in the next three days.