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Oil Stocks Break Out And Hold Gains, At Least For Now

The price of crude oil futures is back up above 70. This, after dropping to less than zero a little more than a year ago. You would think that with all the talk of renewables and electric vehicles, that such a rebound such as this is just on the other side of miraculous. The market says oil remains very much in demand.

The same is true, apparently, of oil stocks, especially the exploration and development kind. If black gold is worth more, then those who bring it to market are more valued. While crazy meme stocks like GameStop and AMC get the most media talk, certain energy stocks have been hitting brand new 52-week highs.

Renewables are the future no doubt, but it may take awhile. Tesla’s stock has tanked from 900 to as low as 550 this year. Although Ford’s electric vehicle division is experiencing good growth, EV maker Lordstown Motors is issuing a “going concern warning” about its business prospects.

Whatever, oil is not going anywhere anytime soon. Enough investors seem to believe the next 3-5 years will be good for petroleum despite claims of its imminent demise. Take a good look at the higher highs on the daily price charts of these 4 oil and gas stocks:

Callon Petroleum.

Look at that price chart: from 12.5 at the beginning of the year to its present 48. The New York Stock Exchange traded oil company is having a great earnings year, much improved over the previous few 5-years. With a forward price/earnings ratio of 4.75, it’s a concern that Calon has more long-term debt on the books than shareholder equity.

That high short float of 21.5% means it’s possible that a decent short squeeze could send the stock even higher. Since market participants seem to be in a short squeezing mood, this is something to consider. No dividend is paid.

oil stock price chart

Calon Petroleum daily price chart, 6 8 21. STOCKCHARTS.COM

Cenovus Energy.

This one shows a move quite similar to the Calun Petroleum price chart. Cenovus has blasted up from 3.25 in November, 2020 to 9.84 this week. This oil and gas integrated company, based in Canada, has negative earnings for the year. Analysts are expecting that to change for the better now that demand has improved. The forward p/e sits at 9.6 and the stock trades at just about book value. Shareholder equity is exceeded by long-term debt. Investors receive a .30% dividend.

oil stock price chart

Cenovus Energy daily price chart, 6 8 21. STOCKCHARTS.COM


The big oil equipment and service firm is up from November’s 14 to today’s 35. Earnings are in the red for the year but analysts are expecting solid improvement. The forward p/e is 22.4. Schlumberger is another oil stock with more long-term debt than shareholder equity. The dividend yield is 1.39%. Goldman initiated a buy on the stock just last month.

oil stock price chart

Schlumberger daily price chart, 6 8 21. STOCKCHARTS.COM

The Energy Select Sector SPDR ETF.

This is the major exchange traded fund that represents all of the key components of the stock market’s oil stocks. The Energy Select Sector SPDR is showing a steady upward pattern with higher highs showing up in early June. The ETF hasn’t seen a high volume gap up like the one in early November, but the trend remains definitely up.

energy stocks price chart

Energy Select Sector SPDR Fund (ETF) daily price chart, 6 8 21. STOCKCHARTS.COM

Obviously, more is likely going on here than just a “renewables versus oil” narrative. What’s important is that, for whatever reason, the petroleum industry is still finding investors with money.
Source: Forbes

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