Forgotten oil stocks on verge of major boom – analyst
Oil and gas stocks are set to make dramatic comebacks, according to a leading hedge fund manager.
Chris MacIntosh, who runs Glenorchy Capital, believes investors have been underestimating the ongoing demand for non-renewable energy and the market is about to turn.
In a special report provided exclusively to Asia Markets, he has identified three stocks he believes could benefit most from a pending shift in sentiment.
The stocks, which he believes could rise in value by more than 300%, are:
Seadrill Ltd (NYSE: SDRL)
The owner of 30 drilling rigs, Seadrill is, according to MacIntosh, “somewhat of a forgotten stock”.
“We suspect that investors have given up on Seadrill after it went through bankruptcy for a second time,” he said.
“That sort of brutal beating tends to scare investors, but Seadrill now finds itself with a strong balance sheet and in a scetor with rapidly improving fundamentals.”
MacIntosh points out the stock price has risen only 20% since being re-listed on the stock exchange last year, and expects it has much more room to run.
Nabors Industries Ltd (NYSE: NBR)
Based in Houston, Texas, Nabors owns the largest land drilling fleet in the world with approximately 400 rigs in more than 20 countries.
“We have discussed Nabors in our investor subscription service before,” MacIntosh says.
“It is one of the few drillers (onshore and offshore) that didn’t go bankrupt over the last few years and one can still buy Nabors at the same price it was trading in the early 1990s.
“That is how out of favour drillers remain.”
The chart below shows exactly how out-of-favor Nabors has been for more than a decade.
Eidesvik Offshore (EIOF)
The company is an operator of offshore service vessels.
It owns and operates a world-wide fleet of purpose-built vessels, providing services to the offshore supply, subsea, offshore wind, and seismic markets.
“We are seeing many companies like Eidesvik make dramatic comebacks after repeatedly knocking on death’s door a few years ago,” MacIntosh said.
“Earnings are taking off, and although the stock prices have increased dramatically, they are lagging behind the pace of earnings growth.
“Finding little gems like Eidesvik is what we live for — stocks that you just won’t hear anybody else talking about, yet these are the very stocks that offer the most asymmetry.”
Chris MacIntosh runs investing newsletter Capitalist Exploits, which specialises in finding asymmetric investment opportunities for his clients. You can subscribe to his weekly report for $1 for your first 30 days. (*Capitalist Exploits stock reports are strictly for subscribers only and should not be shared with external parties without written permission from Chris MacIntosh).