I had to say no.
Oil prices have continued to drift lower despite tremendous geopolitical pressures that should be moving the barrel price higher. And yet, it seems that the oil market is much more concerned with the relative strength of the dollar, a relationship I explained to Stephanie works as a trade relationship only and often fails spectacularly. I hate trading oil based upon the movement of the dollar.
But with that relationship at least now working in tandem, it's been impossible to own many of the very high-beta U.S. exploration and production companies that have made us so much money in the past two years. Stephanie mentioned to me that the Action Alerts PLUS charitable trust she runs with Jim Cramer shed its positions in many of its energy holdings including Occidental Petroleum (OXY) , preferring to concentrate on the more bond-like yielders such as Royal Dutch Shell (RDS.A) .
I could do nothing but agree with this strategy although I think the lower price of oil won't last very long. I still believe that oil is inexorably headed higher. When it does it will naturally benefit the higher beta names like Noble Energy (NBL) , EOG Resources (EOG) and Cimarex (XEC) . I talked with Stephanie about some target prices for those and other energy stocks that I would find hard to resist, should oil prices continue to work lower.
I talk more about the energy sector with Stephanie in the video above.
At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time. Action Alerts PLUS is long RDS.A.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
TheStreet Ratings team rates NOBLE ENERGY INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NOBLE ENERGY INC (NBL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income." You can view the full analysis from the report here: NBL Ratings Report