Sweet 16 Upside

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Sweet 16 Upside

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OilPrice.com: Investment funds could miss out on multi-year bull run in oil & gas stocks
"Oil and gas stocks may be headed for a multi-year bull run, which fund managers will miss if they continue to dump oil and gas stocks in the growing drive to account for environmental, social and governance (ESG) factors in their investments, HFI Research said in an article in Seeking Alpha. The growing number of funds ditching oil stocks could be viewed as a contrarian signal for the energy stock market, which has performed very poorly in recent years and has alienated environment-conscious investors, according to HFI Research."

Read article: https://seekingalpha.com/article/437049 ... r-bull-run

All of the Sweet 16 companies survived the 2nd quarter, the low point for this oil price cycle. They are all generating solid cash flow from operations. As a group, the Sweet 16 closed on August 21 at just 3.2 X operating cash flow per share. Companies of this quality should trade for at least 6X CFPS and those with lots of running room (the "Elite Eight") should be trading for 8X to 12X CFPS. FEAR is the only thing holding back the global economy. Cure or no cure, the fear of COVID-19 will fade magically after the election; about the same time investors figure out we will soon be short oil.
Dan Steffens
Energy Prospectus Group
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