Oil stocks and gas investments have been on the rise as crude prices have skyrocketed. Light crude oil on the New York Mercantile Exchange is up 18% since Dec. 1, from $88 to about $104 a barrel, and investing in oil via the Energy Select Sector SPDR ETF (NYSE: XLE) would have generated 20% profits in that same period. Some of the gas and oil stocks have been rallying even more dramatically than that, with Chevron (NYSE: CVX) stock up 30% since Dec. 1.
Unfortunately, not all gas and oil investments are created equal. Here are 7 major oil investments you should sell immediately and replace with better crude stocks if you want to profit from expensive gas prices:
Petrobras: Integrated oil and gas company Petrobras (NYSE: PBR) is the first energy stock worth selling, having watched its stock price drop -12% over the past 12 months, compared to gains +11% for the Dow Jones and S&P 500 each. After regaining in the start of 2011, this stock has seen another drop of -4% in the last two weeks. Not exactly a leader in the gas and oil sector.
BP PLC: While BP (NYSE: BP) may have rebounded from its terrible summer performance following the Gulf oil spill, this stock is still down -20% in the last year. More recently, BP stock has sunk another -2% in the last 30 days. Analysts are projecting earnings to be 19 cents lower than the EPS posted this quarter last year, making it stand out as a lackluster gas and oil stock.
Total S.A.: International oil and gas company Total S.A. (NYSE: TOT) may have had a solid start to 2011, but since the first week in March, this stock has fallen -4%. More dismal numbers are found in this oil company’s financial statement, where it recently reported a quarterly earnings growth of -2%.
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ENI S.p.A.: Since the middle of February, ENI S.p.A. (NYSE: E) has watched its stock value diminish -4%, much like other stocks on this list. As consumer start switching off their heaters from this winter, the stock price of this oil, gas and power generation company should continue to trend down.
Tenaris S.A.: Holding company Tenaris S.A. (NYSE: TS) may have had a strong finish to 2010, but is down -6% in 2011, compared to gains by the broader markets. Potential buyers of gas and oil stocks also place a priority on dividends, and with a yield of just over +1% this investment is not much to hang your hat on.
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Transocean Ltd.: Offshore drilling service provider Transocean Ltd. (NYSE: RIG) is down -2% over the past 12 months, despite gains toward the end of 2010. More recently, RIG has seen its stock value drop -3% since the beginning of March. Most importantly, experts are projecting EPS of just 89 cents, compared to an actual EPS of $2.22 this quarter last year.
Southwestern Energy: While things may look good for Southwestern Energy (NYSE: SWN) at first glance, experts are projecting EPS to be nine cents lower than the actual EPS reported this quarter last year. Likewise, in its last income statement, SWN reported quarterly earnings growth of -5%. These down earnings numbers should make any potential investor wary.
As of this writing, Louis Navellier did not own a position in any of the stocks named here.
