Should We Be Buying Oil Stocks?

Today I present a short rambling post on oil stocks, uranium and some financial events you might want to pay attention to or not.

Oil stocks for me are just trading positions. All commodities are made to be bought and then sold. I never hang onto them long term but if you have one paying a nice dividend and you like it then have at it.

The most widely talked about and what everyone in Canada buys and owns when it comes to oil are CNQ and SU. I get a lot of questions on VET also and what I think about it.

My answer is always I buy what's down in price and sell when it goes higher. Yes, easier said than done but stick to what is unloved. Companies nobody wants. I own none of the above mentioned companies.

In the U.S. the go to name is XOM Exxon Mobil. It pays a 5% dividend, just closed at $68.56  and has been as high as $83.49 in the last year. I don't own it. Should you buy it? It all depends on your time horizon, doesn't it. If you want to own oil or must own oil then why not? They just can't stay down forever. 

So those are the big dogs in North America where all the institutional money goes.

The world needs oil. The whole banking system and the military industrial complex all runs on oil. In our life time we will still use it and need it. How to profit from it? That's the question for traders and speculators.

What stocks will the money move to? Like I said I like to buy the unloved names.

Current Oil Holdings

I own 7 positions that combined are up 14.5%

AOI, ARX, BTE, BDI, TCW, TOG and WCP

The only one that I'm taking a hit on is BTE. I was too late to take profits a couple weeks ago when it was green.

I will most likely take profits on AOI as I'm up 15% in just 9 days. Faster than I thought so no sense getting greedy.

BDI and TCW are oil service/camp companies. Nobody wanted them a couple months ago so I pounced. I am up 17 and 30% respectively. I think there is more to come but I'm watching them closely.

ARX, WCP and TOG are my dividend payers in this space instead of the large cap names mentioned before.

Crude is getting bid higher so these might be good holds for now. You decide.

"The period of seasonal strength for the Energy Sector ranges from January 21st through to May 9th" - Equity Clock

Anyways that's what I own and what I think of oil stocks. There are lots out there to look at. BIR, CPG, BNP, CJ, PEY and on and on. Pick your horse if you so choose. This sector in Canada is challenged and mired in new carbon taxes, political controversy and numerous unending court challenges. BUY what nobody wants!

What's Going On?

Is America going to war with Iran. So far showing great restraint. They also lied when they told us nobody was hurt after the missile attack on the airbase. Hmmmm!

This has given us an avalanche of rhetoric coming out of Iran. The Ayatollah is in constant spin mode so we know something else in the region is going to blow up. You can feel it. This is why crude is catching a higher bid every week. Slowly mind you but it's higher.

Billions of dollars right now are being pumped into the debt market to help provide liquidity to the investment banks and fund managers. They need money every day. The Fed is printing that money and then lending out to the banks.The banks are in control because they provide the system with much needed cash. The feds balance sheet has gone parabolic. It's absolutely nuts the money they are pumping into this rigged system.

Stocks are going higher every day because all that money is looking for a home that pays it the most. Some of it pays bonuses, some of it share buy backs and some of it to the treasury market. Rates are so low most of the money is buying stocks that pay dividends.

Investing for Dividends in the Canadian Oil Patch

My Final Take

Another area of Energy that is unloved is the uranium stocks. When to buy? Dunno exactly. I have been in and out of EFR but so far no momentum and institutions don't want to play. Depending on your time horizon this is another area that is setting up to move higher. Watch uranium, the price is down and there aren't that many producers out there. I'm looking to catch the next wave up.

Be careful this is speculation and only invest here if you can afford to lose it all. I never invest more than $4K per position. Just what I do.

Do you own any oil stocks? If so, Which ones?