U.S. equities are extending their breakout move — with the Dow Jones Industrial Average extending above the 26,000 level — pushing closer to the prior record highs set back in October.
Optimism surrounds the ongoing U.S.-China trade discussion, with President Trump hinting that an agreement could be forthcoming in a matter of weeks, removing the other major worry aside from Federal Reserve tightening that spooked the market late last year. And we know just how obviously the Fed has turned tail and become super dovish in recent months.
The economic data has been good as well with manufacturing activity out of China perking up and the March U.S. jobs report coming in solid.
Energy stocks are leading the way higher as crude oil prices keep elevating ahead of the start of the summer driving season. West Texas Intermediate crude has pushed up and over its 200-day moving average and is nearing the $63-a-barrel threshold for the first time since November.
A number of cheaper, smaller names in the space are looking ready for big moves higher. Here are seven energy stocks to watch:
EOG Resources (EOG)
Shares of EOG Resources (NYSE:EOG) are moving back to challenge overhead resistance near $100 that has been in play since January. A breakout here would set up a run at the November/December highs and the 200-day moving average, which would be worth a gain of more than 10% from here. The company was recently upgraded by analysts at Tudor Pickering.
The company will next report results on May 3 after the close. Analysts are looking for earnings of 99 cents per share on revenues of $4.1 billion. When the company last reported on Feb. 26, earnings of $1.24 per share missed estimates by 12 cents on a 36.9% rise in revenues. Shares trade at a reasonable 15x forward price-to-earnings multiple.
Occidental Petroleum (OXY)
Shares of Occidental Petroleum (NYSE:OXY) are exiting a tight year-to-date consolidation range to return to levels not seen since early December. Watch for another test of the 200-day moving average, which proved insurmountable back in November, but would be worth at least a near-5% gain from here. Management recently noted plans to double crude exports to 600,000 barrels per day by 2020.
The company will next report results on May 14 after the close. Analysts are looking for earnings of 76 cents per share on revenues of more than $4.1 billion. When the company last reported on Feb. 12, earnings of $1.22 beat estimates by 6 cents on a 33.8% rise in revenues. Shares trade at a reasonable 15x forward price-to-earnings multiple.
Anadarko Petroleum (APC)
Shares of Anadarko Petroleum (NYSE:APC) are rounding up in what looks like the end of a long downtrend going back to July 2018. Watch for a test of the 200-day moving average, which would be worth a gain of roughly 20% from here. Analysts at Citigroup recently resumed coverage on the stock with a buy rating.
The company will next report results on May 7 after the close. Analysts are looking for earnings of 25 cents per share on revenues of $2.9 billion. When the company last reported on Feb. 5, earnings of 38 cents per share missed estimates by 24 cents on a 14.3% rise in revenues. Shares trade at a 17x forward price-to-earnings multiple.
Apache Corp (APA)
Shares of Apache Corp (NYSE:APA) are continuing to rise within the uptrend channel established in December, challenging its November highs. Investors are continuing to react to the solid capital budget and production outlook management released in early February.
The company will next report results on May 29 after the close. Analysts are looking for earnings of 8 cents per share on revenues of $1.6 billion. When the company last reported on Feb. 27, earnings of 31 cents per share beat estimates by 4 cents on an 11.3% rise in revenues. Shares look a bit pricey on an earnings basis, but look good on a price-to-sales metric trading at 1.7x.
Hess (HES)
Hess (NYSE:HES) shares are among the most extended here, already above their 200-day moving average and returning to October’s trading levels. But there is likely more upside to come, with a return to the prior high worth a gain of more than 17% from here.
The company will next report results on April 25 before the bell. Analysts are looking for a loss of 24 cents per share on revenues of $1.6 billion. When the company last reported on Jan. 30, a loss of 31 cents per share beat estimates by 7 cents on a 30.3% rise in revenues. Shares look a bit pricey on a valuation basis, but price momentum suggests things aren’t overdone just yet.
Marathon Oil (MRO)
Shares of Marathon Oil (NYSE:MRO) are battling with the highs set in March, attempting to break free of a multi-month consolidation range. The company is selling its U.K. businesses for roughly $140 million as management focuses 95% of its 2019 capital budget on four key U.S. resource plays.
The company will next report results on May 15 after the close. Analysts are looking for earnings of 7 cents per share on revenues of $1.2 billion. When the company last reported on Feb. 13, earnings of 15 cents per share beat estimates by a penny on a 27.7% rise in revenues. Shares trade at a price-to-earnings multiple of just 13.2x.
Devon Energy (DVN)
Shares of Devon Energy (NYSE:DVN) are pushing higher, also within the confines of a multi-month consolidation range, and are nearing resistance from both their 200-day moving average and their November highs. Watch for a breakout here, despite a recent downgrade from analysts at RBC Capital Markets, as higher energy prices provide a tailwind for the entire sector.
The company will next report results on April 30 after the close. Analysts are looking for earnings of 27 cents on revenues of $2 billion. When the company last reported on Feb. 19, earnings of 10 cents per share missed estimates by 23 cents on revenues of $2.7 billion. Shares trade at a forward price-to-earnings multiple of 13x.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
