How to Fight Higher Prices at the Pump
In last week’s interview, Weiss Ratings Senior Analyst Tony Sagami highlighted several sectors highly benefitting from the Federal Reserve’s money flood.
The energy sector has been one of the most prominent beneficiaries.
As Jessica mentioned, the price of uranium is currently at a nine-year high, and many other forms of energy are surging.
Unfortunately, I probably don’t have to tell you that gas prices are also surging. At the time of this writing, gas prices are at their highest level since 2014. Just recently, the U.S. benchmark West Texas Intermediate briefly touched $80 a barrel.
Although the beginning of the pandemic was a very difficult time for so many, I think we all would happily take back those $1.50-per-gallon gas prices.
While we can’t go back in time for cheaper gas, there are ways to fight back against high energy prices ... and even profit in the meantime.
Consider this: The Energy Select Sector SPDR Fund (NYSE: XLE) is up around 48% this year, compared to 19% for the S&P 500.
Meaning — there are plenty of opportunities in energy, you just need to know where to look.
That’s why, as my colleague, Weiss Research Analyst Kelly Green often points out, the Weiss Ratings are a tremendous resource you can use in your investment search process.
Tony said in last week’s interview that he’s utilized the Ratings to secure gains of 25% on Generac (NYSE: GNRC) and 24% on Tesla (TSLA: Nasdaq) since May 28 in his Disruptors and Dominators service.
Those were strictly green energy picks. Today, I want to look at the energy sector as a whole by using the stock screener feature and see what picks are currently on top.
I simply hit “Add Criteria,” then click industry. I then scroll down and select “Energy.” This process is easy and very user friendly.
3 Top Weiss Rated Energy Stocks
First up is Sunoco (NYSE: SUN) with a “B” rating. You’re probably familiar with this company and have seen their gas stations all around the country. You may even have one of their famous stickers on your cooler; I know I used to have one.
Sunoco distributes and retails motor fuels in the U.S. and is split between two segments: fuel distribution and marketing. It’s fuel distribution segment buys motor fuel from refiners and then supplies it independently to dealer stations, distributors and other consumers of motor fuel.
Sunoco is up 33% year-to-date. It was upgraded to a “B-” rating on May 11 after being out of the “Buy” range since early 2020, and then bumped up again to its current rating at the end of June.
Sunoco’s upgrades are due to an increase in the valuation, growth and efficiency indexes.
The company’s first-quarter earnings were impressive. Operating cash flow increased 280% from $40 million to $152 million. Earnings per share (EPS) increased from roughly 77 cents to $1.60.
For being such a big name in the industry, I was surprised to see such a low P/E ratio of 7.53 and a market cap of only 3.17 billion. Translation: There’s plenty of upside for this Sunoco.
I’d definitely keep this pick on your investment radar.
Next up is Tourmaline Oil (OTC: TRMLF). This pick was upgraded to “Buy” territory recently on June 29, right after its earnings report was released.
The company is a Canadian oil and natural gas producer in the Western Canadian Sedimentary Basin.
Its EPS jumped from about 65 cents to $1.14, cash flow increased to $570.2 million from $225.2 million year over year.
This is an up-and-coming pick. The last time it sported a “Buy” rating was January 2016; after that, it got downgraded to a hold at “C+.”
Tourmaline is a clear pandemic and “money flood” — as Tony would call it — winner. Since the March 2020 pandemic lows, the stock is up over a blistering 500%.
Is its Usain Bolt-like sprint up over? That’s up for your own due diligence to decide. But clearly, the ratings don’t think so.
Lastly, we have FLEX LNG (NYSE: FLNG), also with a “B” Weiss Rating.
FLEX LNG is far more of a unique company than Sunoco and Tourmaline. It transports liquefied natural gas worldwide.
And it’s no surprise this pick is up around 119% so far this year considering how high natural gas prices have gotten.
I’ve spent many cold winters in the Northeast, and I can tell you that if there’s a frigid winter this year, natural gas will be a highly prized commodity when the winter coats and shovels are out.
FLNG was upgraded to a “Buy” in May 2021 for the first time ever. It received its first rating in September 2019.
There are many ways to play the natural gas surge, like Tony pointed out, but FLEX LNG seems like an awfully strong candidate.
I’ll be playing this energy surge and I’ll be far more comfortable doing so with the Weiss Ratings at my side.