I’ve been beating this drum for a while now, but with the recent political unrest in the Middle East, it’s looking even more likely that 2011 could be a hugely profitable year for energy stocks.
When the energy sector is hot, not only can it lead you to some big-earning, fast-moving growth stocks within the group, but having a portion of your portfolio in energy can be an excellent hedge trade.
High oil and gas prices can often weigh down the majority of the market while rocketing energy stocks higher. This means that it’s not uncommon to see days when the NASDAQ falls 1% or more and a top energy stock is up 5% or more.
With this in mind, here are five powerful energy stocks you should be considering.
GPOR – This stock broke out of a classic Darvas Box on January 31st and it has surged 26% higher in less than one month. GPOR has great earnings and big expectations for 2011. It should be noted that the company is scheduled to report earnings before the bell on March 10th.
HAL – Here’s a stock that is somewhat under the radar as you wouldn’t normally associate a company as large as Halliburton to be a high-beta stock. However, HAL is currently moving at a rate of about 1.5 times faster than the general market as it approaches its all-time high of $55.38. If it can break through that key price point, it could be off to the races.
NOG – When trouble brews with overseas energy producers, companies like NOG, which produces oil and gas in the Rocky Mountains, become much more attractive. It also helps that NOG is already boasting stellar earnings. This company recently hit a little resistance at the $30 level, so look for a break through there to be a potential buying opportunity.
WLT – Not every energy play should be dedicated to oil and gas. Coal, solar, and wind are all growing groups as well. Coal-producer WLT is one such stock to watch. While its recent earnings report disappointed investors and put pressure on the stock, the company still has spectacular earnings numbers (up 320% in the most recent quarter) that are keeping WLT on our radar.
XOM – You wouldn’t expect to see America’s largest publicly-traded company show up on a list of typical Darvas stocks (we normally trade more nimble companies that have the potential to double or triple in a short period of time), but you can’t talk about energy stocks without including Exxon Mobil. Similar to what Apple is for tech companies, XOM is an excellent indicator for its industry. The stock has also been a nice and steady grower since bottoming in July. Having a slow grower like XOM in your portfolio can be a very wise choice as it helps level out volatility while still allowing you to profit from the energy sector.