Wondering Which Oil Stocks To Buy? Consider These!

| March 23, 2015 | 0 Comments

Analyst ActionWant Oil Stocks To Buy? Wall Street Says Get These!

It’s time for another look at compelling analyst upgrades and downgrades.

In case you’re unaware, analysts at the biggest banks and investment firms on Wall Street provide research on a multitude of natural resource companies.  It’s not always the case, but most times a notable bullish change in a respected analyst’s outlook can have a significant influence on a company’s share price.

Of course, their ratings changes aren’t always positive…

When an analyst applies a big downgrade, shares can lose ground quickly.

After all, it’s not a great idea to be fully invested in a company that’s falling out of favor with Wall Street.  At the very least, a downgrade can slow buying activity, which opens the door to lower prices.

Either way, it’s important to keep an eye on the analyst activity.  Doing so can give you a substantial leg up on the market.

These Are The Best Oil Stocks To Buy According To Wall Street… 

Magnum Hunter $MHR – This Utica/Marcellus Shale natural gas producer has been hit hard the past year.  Shares are down 75% from March 2014 highs.  With oil and natural gas prices sitting at or near multi-year lows, the company is in a pinch due its highly leveraged balance sheet.

However, analysts at Suntrust believe the company will not only survive but prosper as oil and natural gas prices recover.  Suntrust upgraded $MHR to “buy” from “neutral” with a $4 price target last week, which is an 87% premium to current prices.

Cabot Oil & Gas $COG – Analysts at Global Hunter Securities upgraded the Marcellus/Eagle Ford shale operator to “buy” from “accumulate”.  They also upped their price target on the well-managed company to $38 from $33.  With shares crossing the tape at $28 last Friday, the new price target represents 35% upside profit potential.

Diamondback Energy $FANG – Here’s one to really take note of.  Global Hunter Securities upgraded this Permian Basin focused producer from “accumulate” to “buy” last week.  They also upped their price target on the company from $86 to $92.

Part of the reason for the upgrade is likely due to the fact Diamondback has breakeven costs below $30 a barrel.  And despite the current oil downturn, the company is still expected to grow 2015 production volumes by 40% year-over-year!

With shares trading at $71 last Friday, Global Hunter’s new price target represents 30% profit potential.

SM Energy $SM – This prudently managed explorer has operations in the Rocky Mountains, Mid-Continent, Permian, and South Texas.  Global Hunter Securities upgraded the company from “accumulate” to “buy” with a $59 price target.  It’s important to note that Howard Weil, Barclays, and Topeka Capital Markets all put $SM at “overweight”, “buy”, or “outperform” in February.

With shares trading at $45 late last week, the new price target is a 31% premium to current prices.

There you have it…

What you see above are the most captivating, and potentially profitable, ratings changes I came across over the past week.  Shares prices may already be reacting to the ratings and price target adjustments.

Now remember…

Just because Wall Street analysts believe the companies above are the great oil stocks to buy right now, doesn’t mean you dump all your money into them.

Do your own due diligence and always use correct position sizing and risk control measures in your trades. 

Until Next Time,

Justin Bennett

BIO:  Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.

Tags: , , , ,

Category: Natural Resource Stocks

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.