CES Energy Solutions Corp T.CEU

Buying Opportunity?

[retiredcf]

I would appreciate if you can provide some insight into why Oil and Gas stocks came down so much so quickly. Are long term fundamentals still  indicating that supply will remain tight? if yes, would you consider this a buying opportunity?

It can be hard to pinpoint reasons for such moves. Profit taking is the easiest answer, with energy the only strong sector this year. When investors rotate sectors, they often sell the winners. The supply situation has not changed much, but investors are now also very worried about recession, and energy is sensitive to economic growth. China is a big factor here. In addition, politicians seem hell-bent on targetting energy companies 'excess profits' (even though they are price 'takers'). That said, with valuations already reflecting recession and other worries, and corporate balance sheets in the sector improving quickly, we would see it as a buying opportunity for those interested in the sector, up to a reasonable weighting based on one's goals. (5iResearch).