Sweet 16 Update - May 17

[dan_s]

The Sweet 16 gained 3.77% during the week ending May 16, but it is still down 7.44% YTD.
The S&P 500 Index gained 4.69% during the week ending May 16, and it is now up 1.30% YTD.

The S&P 500 Index is now up 6.2% since March 31st. < FEAR of the Tariff War is fading fast.

JUN26 futures closing prices on May 16:
> WTI oil closed at $62.49/bbl < I am using $62.50 in my Q2 forecasts
> NN natural gas closed at $3.334/MMBtu < I am using $3.25 in my Q2 forecasts.

After the Republicans pass the One Big Beautiful tax bill, I do expect the oil price to ramp up this summer and end the year around $70/bbl. Based on the supply/demand fundamentals, the "Right Prices" in 2026 should be near my forecasts of $75/bbl for WTI and $4.50/MMBtu for NGas. If so, 2026 will be a very good year for all of our three model portfolio companies.

Natural gas prices should move higher during a HOT summer as the weekly storage builds will get much smaller. If we do get a Bidding War for natural gas supply between the utilities and the LNG exporters it will be in Q3, like it was in August 2022.

All of the Sweet 16 produce a lot of natural gas and NGLs. My Top Pick for natural gas is now CTRA. CRGY and OVV will also get nice revenue boost from rising natural gas prices. AR, EQT, and RRC are closest to pure gassers.

An updated Sweet 16 summary spreadsheet, which also has a Tab 3 that shows information about all of the stocks in our Small-Cap and High Yield portfolios, will be posted to the EPG website this afternoon.

I will be speaking at the Mick Law Energy Conference in Dallas on Sunday afternoon at 3PM CT.

[dan_s]

All 16 of the forecast/valuation models have been updated.

13 of the Sweet 16 profiles have been updated. I still need to do my final review on the profiles for FANG and OVV. Veren has merged into Whitecap, which I need to spend a day on before deciding if it should go into the Sweet 16.

I am in Dallas now at the Mick Law Energy Conference. I will be back at my desk on Tuesday, and we have a Houston luncheon (hosted by KGEI) on Wednesday.

Most of the forecast models for the companies in our Small-Cap Growth and High Yield Income portfolios have been updated.

[dan_s]

On my drive up to Dallas this morning I listened to Maria Bartiromo's show on Fox Business. One of her guests said Diamondback Energy (FANG) was his top pick. He also predicted that more money would be rotating into the energy sector as Fear of the Tariff War fades.