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SandRidge Energy's modest hedging, net cash and oil-focused bolt-on acquisitions make it possibly the best small-cap way to benefit from every day of $100+ oil, though the market dismisses it and could have a wakeup moment. A solid Q3 confirming oil production growth and validating its recent bolt-on timing faces a low bar with minimal downside. Still, Kolibri Global Energy, which is breaking out, is probably the right play, and SandRidge may underperform it. x.com x.comÂ
Canadian Natural Resources' slowly declining oil and gas reserves will last many years and give it very steady production. It generates a lot of cash even when markets are tough, has raised its dividend for 26 years in a row, and plans to return 100% of free cash flow to shareholders through dividends and buybacks. x.comÂ
EROK looks like a low-risk buy as a debt-free, land-owning royalty business with little representation in major indexes, so it adds no meaningful systemic risk. The case only breaks if the world stops needing oil, the basins run dry, or AI no longer needs land, water and natural gas, all of which seem unlikely. x.comÂ
Vista Energy grows over 20% yet trades at about 10x earnings, while most big oil companies trade at 20-25x with single-digit growth. It also works as an oil hedge. x.com x.comÂ
EOG Resources is deeply undervalued on EV/EBITDA, a big discount given where oil prices are now, and the chart looks strong. x.comÂ
Oil producers and royalty companies such as Canadian Natural, Suncor, Freehold Royalties, Viper Energy and Obsidian Energy can make money without oil going higher, if prices stay elevated longer than the market expects, say through year end. Many are still valued on trailing free cash flow yields, realized prices and production rates, none of which reflect the current elevated spot price. x.comÂ
EQT, Range Resources, Expand Energy, Magnolia Oil & Gas and EOG Resources are cyclicals catching an earnings tailwind before the crowd notices, the setup Peter Lynch loved. They passed a screen alongside Coterra, all natural gas or oil producers with disciplined balance sheets and forward P/Es of 9-12. x.comÂ
US energy stocks are too cheap to ignore while investors pay up for richly valued growth names. The sector trades at 6 to 8 times earnings with massive free cash flow, yet makes up only 3.5% of the S&P 500. SpaceX and Tesla combined are worth more than the entire energy sector, with the crowd paying 90 times revenue for a rocket company. x.comÂ
Texas Pacific Land is not a buy here because energy is much closer to a top than a bottom in terms of panic. It would need to fall about $100 further, or energy stocks would need to drop back to earlier lows, before it is worth buying. Energy should be bought amid pessimism and belief in a never-ending glut, typically after an economic calamity sends oil down big, not during a war with Iran. @jc_tricky counters that the energy sector's breakout above 20-year resistance makes those lows unlikely. … Show more