Is Now The Time To Buy Energy Stocks? (Podcast)

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About: iShares MSCI Global Energy Producers ETF (FILL)
by: SA For FAs

Summary

Energy is the classic late-market-cycle investment that rises to the fore when growth begins to slow and stocks look expensive.

What’s more, energy stocks have been subdued since the summer of 2014.

The market doesn’t seem prepared for a reversal, since the three largest energy producers – U.S., Russia and Saudi Arabia – are reaching new production highs.

A possible catalyst could be Iran, which has vowed to take revenge for U.S. sanctions, and has successfully tested new stealth drones that could target oil tankers.

Even without geopolitical instability, it’s plausible that the current robust energy supply will fail to keep up with fast-growing demand, and prices will steadily rise.

Energy is the classic late-market-cycle investment that rises when growth begins to slow and stocks look expensive. What’s more, energy stocks have been subdued since 2014. The market doesn’t seem prepared for a reversal since the three largest energy producers – U.S., Russia and Saudi Arabia – are reaching new production highs. A possible catalyst could be Iran, which has vowed to take revenge for U.S. sanctions. Even without geopolitical instability, the current energy supply may simply fail to keep up with demand, and prices will rise. This brief podcast (3:17) suggests that one ETF in particular (FILL) offers some attractive characteristics that could make it a good vehicle for taking a position on energy stocks.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.