Pro: buy European oil stocks to benefit from higher oil prices

on May 18, 2022
  • Bleakley's Peter Boockvar says European oil stocks have more room to run.
  • The Vanguard Energy Index Fund ETF (VDE) is already up 40% for the year.
  • He warns the market overall could continue to sell-off in the coming weeks.

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The Vanguard Energy Index Fund ETF is already up 40% for the year, but Peter Boockvar is convinced the sector is not out of juice yet.

What to buy within the energy space?

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According to Bleakley Advisory Group CIO, one of the best ways to benefit from higher oil prices is to invest in the European oil stocks. This afternoon on CNBC’s “Power Lunch”, he said:

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“Energy stocks have room to go. Particularly, the European oil stocks that are barely above their pre-COVID levels. The group as a whole as part of the S&P is only about 5.0% and I think that ratio will go higher.”

Pioneer Natural Resources on Wednesday said oil will likely remain above $100 a barrel in the next couple of years as Russian energy goes off the market.

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U.S. equities might not have bottomed yet

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Boockvar dubbed energy his “highest conviction idea” in a market overall that he warns could continue to sell-off in the coming months. Speaking with CNBC’s Kelly Evans, he noted:

17 times earnings on near record profit margins is a risk. So, there’s a lot more room potentially on the downside. I think the PE multiple continues to compress. At the same time, that earnings estimates, I expect to fall as the year progresses.

A day earlier, Peapack Private Wealth Management’s David Dietze said BP plc was a great buy as geopolitical tensions in Eastern Europe continue to put tremendous pressure on supply.

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