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Energy Remains the Most Undervalued Sector -- M*

davfordavfor
in Other Investing
Per their crystal ball....
We expect a nearly complete recovery in crude demand as the pandemic subsides in 2021.

Energy remains the most undervalued sector, trading at a 22% discount compared with a 6% premium for the overall market.

higher prices are necessary. And if firms are unwilling to invest enough capital at midcycle prices ($55/bbl West Texas Intermediate, $60 Brent), we wouldn't rule out prices temporarily rising even higher.

https://morningstar.com/articles/1016129/energy-remains-the-most-undervalued-sector

Comments

  • Derf
    Anyone pulling the trigger on this one ?! Spiffers, where are you ?
    Stay Safe, Derf

















  • davfordavfor
    edited January 2021
    @Derf Perhaps the domestic oil patch experienced enough carnage in 2020 and midstream suffered (and changed) enough over the course of the past 1/2 decade that both are poised to serve as good multi-year investments at this point. That's my generalist's assessment. Time will tell if it is correct.

    2020 investments in high income portfolio included:

    **RTLR in April and some more in September
    **FANG, KMI, and ENB from August to November
    (FANG has more than doubled since purchase to become the portfolio's largest holding. It just passed AVGO and is nearing 5% of the portfolio. So it may soon be time to consider a little trimming. But, no thoughts of more selling than that.)
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