I’m not trying to predict the future. And I’m not one to hit you with bold and contradictory headlines. You will not see me pounding in the stands in Davos. That’s not my style.
I stay with what works. I dig into the data, identify trends and then track them for profits.
And with the markets being in much of their recent highs, you want buying opportunities. At the same time, avoiding the worst of the worst is no less essential.
Let’s try to do this in a sector that I’m very bullish about: energy.
It has been a difficult year in the financial markets, but energy stocks have been a rare bright spot. I became a bull in the sector many more years ago, after my models suggested that energy stocks would perform better than the wider market.
And now the same system will help us eliminate the worst and buy the stocks with the most overwhelming potential in the market.
Energy stocks: Why settle for “good enough”?
There are many ways to play in the field of energy.
You can buy a broad-sector traded fund (ETF) or mutual funds to get sweeping exposure to the entire sector. For many investors, this is fine. Most stocks within a sector tend to move in the same direction, so choosing the right sector is usually good enough.
But why settle for “good enough” when we have a chance to smash the market? After all, a sector fund includes everything: the good, the bad and everything in between.
Why not focus on the good and eliminate the backlog?
Step one: Remove energy lag
I dived into the energy realm through my proprietary power rating system. I found one solid stock to consider and two to cancel.
Let’s start with the stocks to avoid.
I have activated a screen of all the energy stocks currently rated by my stock rating system. This sector is generally well-ranked these days, since inflation and the war in Ukraine have raised energy prices.
But there are still some real dogs on the list too.
consider Reconnaissance Energy Africa LTD (OTC: RECAF).
It is a search and production company based in Canada with development projects mainly in Namibia and Botswana. Africa is an interesting market … and in some ways similar to China 30 years ago.
Capital will be made in this border market. But touring energy may not be part of this equation.
RECAF Rank 5 out of 100 In my model, making it one of the stocks with the lowest rating in our universe. It is rated 7 poor on value, 8 on quality and 4 on growth!
Now, who knows? Crazy things happen in the market every day. RECAF may explode higher. But my model claims that the odds are not in our favor here, so we better look elsewhere.
As another example, look at the stock of DMC Global Inc. (NASDAQ: boom).
Now, I admit that the ticker icon caught my attention. I would like to think that “BOOM” refers to the company’s products – explosives used in oil and gas drilling – and not to the management’s perception of risk management.
But looking at the stock through the lens of my rating model, it’s another one we better avoid.
BOOM LESSONS a 26 out of 100. Apart from size – where it is ranked 72 – stock prices are below 40 in any other index. In other words, it is an expensive stock, with low and quality growth, which is also volatile and shows bad momentum.
This is not something we want to hold.
Step Two: Buy the highest rated energy stocks
Take a look at the energy supply maybe really wants to Owner: Meiger Italian Combined Oil Eni SpA (NYSE: God).
Eni ranks a“Strong Bulls” 97 out of 100. This is in the top 3% of all stocks we rank.
It gets a score above 90 in three of our six factors, and above 80 in any factor other than size. E boasts a star 99 approx. And it even distributes an attractive dividend of 7%.
This stock has potential…
But my highest beliefs in the field of energy lie in the future of renewable energy and the mega trend of green energy.
We invest in The next wave of energy stocks B Green Zone Fortunes. These are the companies that are working to disrupt the global energy industry of billions of dollars.
To be honest, some of these stocks went down after the technology sale. But I see this as an opportunity to buy at even better valuations, as these companies are laying the groundwork for explosive growth in the months and years ahead.
See how a tiny Silicon Valley company is using artificial intelligence (AI) technology to unleash the world’s largest untapped energy source … and how its early investors can reap the benefits … Watch my “Infinite Energy” presentation now.
By joining Green Zone FortunesYou will get access to all of our top recommendations for energy stocks, as well as an in-depth analysis from me and Charles Sizemore, my co-editor.
So click here to watch my presentation now.
And get ready to smash the market with our leading renewable energy plays.
For good profits,
Chief Investment Strategist
Post-Crash Energy Sector Shortlist (Avoid 2 Stocks + Bonus Buys) Source link Post-Crash Energy Sector Shortlist (Avoid 2 Stocks + Bonus Buys)