XLE Breakout – Energy Select Sector SPDR ETF (NYSEARCA:XLE) | Seeking Alpha

Summary

  • XLE has broken out of a downtrend that began in late 2016.
  • With crude oil potentially breaking out of its downtrend, the upside for XLE could be substantial.
  • I see XLE as relatively undervalued to crude oil, and plan to remain long if crude oil confirms its upward move.

Read the full article at Seeking Alpha right here: XLE Breakout – Energy Select Sector SPDR ETF (NYSEARCA:XLE) | Seeking Alpha 

Is It Finally Time To Invest In Energy? (XLE)

Beaten-down sectors provide opportunity

The S&P 500 Index is up about 10% so far this year, but the energy sector is off over 19%.1 Yet, my team believes conditions are ripe for a turnaround in energy.

  • Exploration, production and service company valuations are near historic lows based on our analysis, trading at a price-to-book (P/B) multiple of 0.55. This compares with an average P/B of 0.88 for the sector using data all the way back to 1952.2
  • Many energy companies are currently what we call “under-earners.” In good times, these firms can be cash-generating machines, but the long stretch of low energy prices has resulted in layoffs, dividend cuts, fewer stock buybacks and expense reductions. Once prices rebound a bit and stick, these companies should be even better positioned for growth, in our view.
  • The sector is clearly out of favor and has been for some time. We believe investors are always wise to consider sentiment, but should then dig a little deeper and analyze the trends and facts.
  • After the long period of underperformance, many funds (understandably) lightened up on energy shares and are now underweight.3 At some point, this trend will reverse, and demand for these shares should increase. Also, many investors have taken short positions in energy stocks, and they will have to buy shares in order to settle these positions.
  • Last, energy company capital expenditures (CapEx) are at historically unsustainable levels relative to cash flow.

Read the full article at ETF Daily News right here: Energy Select Sector SPDR (ETF)(NYSE:XLE): Opportunity Awaits | ETF Daily News

Accumulated Some More Energy Equities Today (PXI)

We are still accumulating Energy Equities. Today we accumulated some more shares of the PowerShares DWA Energy Momentum Portfolio (PXI : $PXI). Folks, you gotta buy this stuff when it’s on sale. I wrote about investing in Energy ETFs back in February 2017 right here: Discovering Value in the Top 3 Energy ETF’s. More specifically, I wrote about the PXI ETF right here: Looking Under the Hood of the PowerShares DWA Energy Momentum Portfolio ETF (PXI) $PXI

Still Accumulating Energy Equities (PXI)

We still don’t have a bottom in oil or oil related equities. So, we are back into accumulation mode of Energy Equities. Today we accumulated some more shares of the PowerShares DWA Energy Momentum Portfolio (PXI : $PXI). You gotta buy this stuff when it’s on sale folks. I wrote about investing in Energy ETFs back in February 2017 right here: Discovering Value in the Top 3 Energy ETF’s. More specifically, I wrote about the PXI ETF right here: Looking Under the Hood of the PowerShares DWA Energy Momentum Portfolio ETF (PXI) $PXI