peony
Equity Investor & Researcher
Halliburton is priced for shrinking margins just as fracking capacity tightens. Revenue has been roughly flat since 2023 while operating margin fell from 17.7% to 13.1% and EPS from $3.13 to $2.37, so it trades at 15.3x expected earnings versus about 22x for SLB and Baker Hughes. Years of underinvestment have left less North American frac equipment, and management says its fracking schedule is fully booked. Each one-point margin gain adds about $0.20 of EPS. x.comÂ
TechnipFMC is a picks-and-shovels play on rising oil prices, as the third-largest US oil and pipeline name with the strongest growth, best IBD metrics and best technical upside. Baker Hughes and SLB are good, but not this good. x.comÂ
GE Vernova's tanking earnings are a dealbreaker, even after the stock's 60% gain in six months. It had been an earlier pick for 2026 as the year of energy following AI's year in 2025. x.comÂ
Kodiak Gas Services' compression business is sticky by physics, and its new power business is not priced in. Moving a placed compression unit to a competitor costs about $250,000 and a convoy; fleet utilization is 98.2%, compression gross margin 70.6%, and EBITDA guidance rose to $830-860M. A Baker Hughes deal secures 1 GW of turbines through 2030 with an option for 1.8 GW more, backing management's target of 2 GW of power by 2030, up from 384 MW. x.comÂ
ConocoPhillips looks cheap against its sales. At 5x mid-cycle sales, give or take 12%, fair value is $224.66-$285.93, leaving the $127.53 price 43% below the low end; it would be expensive only above $193. The view uses reported earnings and revenue estimates only, without fundamental work. x.comÂ
KSB is a rare find at a P/E of about 10 in the current market mania. Per @MoodyWriter13, its specialty pumps and valves are essential for nuclear and gas-fired power plants, copper mines, oil sands and LNG, end markets already drawing capital from the AI supercycle, and a commodity supercycle would need huge volumes of its pumps. It also trades at about 4.7x EV/EBIT. x.comÂ
US energy stocks are being steadily accumulated after a 17-year base, and that base will not resolve in a month. The sector broke out this year and pulled back on contracting volume, which is digestion, not distribution. Energy trades near 13x earnings versus about 20x for hyperscalers. Stocks now rise with oil and get bought back when oil falls. Tech is priced for the cost of capital to come down; energy for the reason it will not. x.com x.com x.comÂ
US energy stocks are mispriced by extrapolation bias, priced for a world that has already changed. In Q1 2026, tech and communication services posted 50%+ earnings growth while energy printed -4%, the only sector FactSet flagged for a downward revision. Ex those two sectors, S&P 500 growth was 9.3%. The 10 largest energy stocks carry a 36-month beta of 0.0003 and an 8% free-cash-flow yield on trailing $65 oil. x.comÂ