U.S. equities continue to move lower on Tuesday as Wall Street continues to sour on the policy implications of the Trump White House. Attention turned from a focus on positives like tax reform to negatives (for big business), such as a clamp-down on immigration and the chaos stemming from a fight with congressional democrats over everything from cabinet picks to executive actions.
As the Dow Jones Industrial Average moves further below the 20,000 threshold, a growing number of stocks are succumbing to the selling pressure.
Energy stocks in particular are weakening here amid bearish inventory data, evidence of increased U.S. shale production activity and doubts about the implementation of that OPEC output freeze.
Here are four energy names to avoid:
Energy Stocks in Trouble: Chevron (CVX)
Chevron Corporation (NYSE:CVX) shares continue to move lower after disappointment with weak earnings results last week, featuring earnings of 22 cents per share (42 cents below estimates). This, despite a 7.7% rise in revenues from last year and aggressive expense cutting. Overall, capital and operating expenses were cut by $14 billion.
But it wasn’t enough as investors realize Trump’s pro-energy policies are likely to keep a lid on crude prices and thus, profitability and revenue growth in the sector.
The company will next report results on April 28 before the bell. Analysts are looking for earnings of 92 cents per share on revenues of $34.3 billion. Edge Pro subscribers are enjoying a 11% gain in their Feb $110 CVX puts.
Energy Stocks in Trouble: ConocoPhillips (COP)
ConocoPhillips (NYSE:COP) shares have dropped out of a two-month trading range and lost its 50-day moving average returning to levels not seen since late November. This despite a number of analyst upgrades, including a Jan. 11 note from Societe Generale.
Back in October, the company reported better-than-expected results, with a loss of 66 cents per share beating estimates by four cents.
The company will next report results on Feb. 2 before the bell. Analysts are looking for a loss of 43 cents per share on revenues of $7.6 billion.
Energy Stocks in Trouble: Marathon Oil (MRO)
Marathon Oil Corporation (NYSE:MRO) has dropped out of its two-month downtrend range to lose its 50-day moving average. This takes shares back to its late-2016 range near $16-a-share, which marked the highpoint of the initial bounce out of the early 2016 low of $6.40.
The stock suffered a downgrade on Dec. 13 from analysts at UBS worried about stretched valuations.
The company will next report results on Feb. 15 after the close. Analysts are looking for a loss of 15 cents per share on revenues of $1.2 billion.
Energy Stocks in Trouble: Schlumberger (SLB)
Schlumberger Limited. (NYSE:SLB) shares have fallen out of a three-month trading range by falling below support at $84 and at its 50-day moving average. This after reporting a mixed quarter last week, with revenues falling nearly 21% and earnings missing slightly.
A focus on cost control wasn’t enough to overcome weakness particularly in its international business as deepwater and mature field markets slow.
The company will next report results on April 20 before the bell. Analysts are looking for earnings of 27 cents per share on revenues of $7.1 billion.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
