Top Energy Stocks - Oil and Gas Independents and Oil Refining Stocks

Top Energy Stocks - Oil and Gas Independents and Oil Refining Stocks

Many energy stocks are trading at very attractive valuations as this article is written. MR believes this is the right time to start scaling into these stocks and ETFs if you haven't done so already.  And, even though these stocks could still pull back from these levels, the patient investor will be rewarded. Investors should take advantage of the low prices in our recommended stocks list. Furthermore, this article details two more strong reasons that energy stocks and energy ETFs will be good long term investments beyond 2012. This is part 3 of a 4 part blog series.

This article will add to more reasons to invest money in energy stocks and energy ETFs and details support for upward price pressures going forward for years to come.

Reason #7: The fast growth of the emerging market middle classes and their huge demand for commodities to support infrastructure growth will put enormous upwards pressure on commodity prices across the board, including oil, coal, gas, and all refined products.

MR has previously written about the growing middle classes in the emerging market countries like China and India. The strong growth and large population numbers are putting huge demand pressure on all commodities for transport, jewelry, infrastructure for businesses and residences, agriculture commodity related products, etc. This increasing and high demand worldwide for commodities in general will push energy prices up along for the ride.

Remember, when those steep rises in commodity prices occurred in the 1970’s and early 1980’s, there was basically very little demand coming out of emerging markets. In particular, there was a worldwide population of about 1 billion and now it is over 6 billion. That is 6X the demand assuming it was only a linear demand curve. Based on the new world, we would argue that the demand is not equal to what it was per capita back then but actually significantly more. It is clear that the parabolic move up when inflation starts rearing its ugly head could make the 1970’s rise in commodity prices pale in comparison.

Reason #8: The valuations of numerous energy stocks are very compelling at current levels. This is especially true when MR factors in earnings that we believe will accelerate faster than most analysts are predicting when oil and gas prices start rising in 2012.

Even if one uses the current projections of a very modest increase in oil and gas prices as well as the conservative estimates on earnings, the valuations of oil and gas independent stocks and the oil refining stocks are very attractive at these price levels.

The following chart lists our favorite picks in these two key investment areas.

Top Oil & Gas Stocks Independents and Oil Refining Stocks:



** Note: MR wants to point out that we previously included many strong natural gas independent stocks in a previous blog and we will not repeat them here.

Take partial positions after the next pullback in the market which should happen in the next few days and probably some next week. Add to your position on 5% drops (if they ever occur) to build out your investment position. Our best picks are highlighted in yellow.

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