Jensen: EMES Still in Early Innings

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The market staged a nice but unconvincing rally on Monday after last week's pullback in equities. This sort of back and forth movement in the market should continue until the market gets some clarity around domestic and global growth prospects.

On Monday, this column looked at some of the high yield/low beta plays that should outperform in an increasingly volatile market. I have a good portion of my portfolio in these value plays. For growth, I am trying to invest in themes that still look intact.

One of these continues to be the domestic energy boom that I still feel is in its early innings. I have covered a myriad of exploration and production plays I like in recent months. Let's take a look today at the landscape for energy services concerns that should do well as drilling continues unabated.

I believe it is important to differentiate between onshore and offshore drilling plays. I am underweight the offshore sector as that industry is seeing declining day rates, falling utilization rates and a rash of recent analyst downgrades. These concerns will offer eventually a great long-term entry point but it does not feel like we are quite there yet.

I am more optimistic about some of the larger onshore plays whose stocks spent most of 2012 and 2013 marking time, but have shown strength since the last quarter of 2013. WTI oil prices remain near $100 a barrel and natural gas prices have improved substantially of late.

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