23.02.2015 - Deep Value Oil ETFs for the Undaunted Investor
Oil services-related exchange traded funds are among the hardest hit after the plunge in energy prices. For the more risk-tolerant investor, the pullback presents a potential value play on a beleaguered sector. For instance, the Market Vectors Oil Service ETF (NYSEArca: OIH) has declined 21.8% over the past year. Consequently, OIH is currently trading at an 18% discount, according to Morningstar analyst John Gabriel. The oil services ETF shows a price-to-earnings of 12.6, compared to the 17.3 P/E of the SPDR S&P 500 ETF (NYSEArca: SPY). While oil services stocks look cheap as a long-term play, Gabriel warns that short-term volatility could send OIH lower over the next 12 to 18 months before it settles into equilibrium – companies can not shut down operations overnight and production is expected to rise on increased efficiency and contractual obligations...............................................Full Article: Source
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