8 Reasons To Go Long Murphy Oil

Bret Jensen submits:Oil prices have had a significant pullback over the last six or so weeks. In sympathy, oil stocks have also had a corresponding selloff and have gone down more than the market overall. Is it time to starting trolling for bargains in this sector? Here are three oil majors to consider. They all have had pullbacks over the last six to eight weeks. They also have low valuations, good growth prospects and rock solid balance sheets.

By Bret Jensen:The rollercoaster continued in the market on Monday. The market shot up over two percent as hopes for some sort of resolution in Europe gave equities a nice push. Energy stocks really took it on the chin last week, and many of the major integrated oil companies are heavily in bargain territory.

By Bret Jensen:With oil continuing to be priced in the high nineties for WTI (West Texas Intermediate crude) and even higher for Brent, major integrated oil firms seem to have good prospects at these valuations. One of my favorites that has major upside is Hess (HES).

Cheap natural gas unleashed from previously unreachable shale sources could eventually provide a boost to U.S. steel manufacturers, but the benefits have not shown up in their bottom lines just yet.  

By Bret Jensen:I am becoming more cautious about taking on new positions as this rally seems overbought. That being said, I am still a big believer in the energy sector as oil prices remain stubbornly high despite slowing growth in China and the problems in Europe. One stock that is rapidly growing earnings and revenues that should be a long term winner is Noble Energy (NBL).

By Bret Jensen:Stocks in the energy sector have been taken out to the woodshed over the last few months as oil prices have fallen substantially. It is tough for investors to catch a falling knife, but it could be prudent to start accumulating small positions in some small operators that have great long term prospects. I especially like energy producers whose management is starting to step and buy new shares in their companies.

By Bret Jensen:Very few sectors of the market have been hit harder than the oil & gas exploration companies over the last six months. Historically low natural gas prices and falling oil prices have hit the area hard. Several stocks that have heavy exposure to natural gas production have been decimated. Forest Oil (FST) is one those unlucky equities.

By Bret Jensen:There is more excitement in the oil patch today than at any time in decades. Improving technology and high oil prices are driving significant domestic production increases. There is even talk about the United States achieving energy independence within a generation. Given low interest rates and increasing interest in energy producing acreage, I expect M&A to significantly pick up in the energy sector over the coming year.