Stifel Says Not to Wait for Oil to Bottom: 4 Stocks to Buy Right Now

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Concho Resources

This company is one of the top energy plays in the Permian Basin in West Texas. Concho Resources Inc. (NYSE: CXO) is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The company also whispered to be a possible takeover candidate.

While second-quarter revenue numbers were less than Wall Street expected, and the company posted a net loss, adjusted earnings per share topped Wall Street expectations.

The Stifel price target is $126, but the consensus target is $137.55. Shares closed Friday at $100.96.

Cimarex Energy

Cimarex Energy Co. (NYSE: XEC) is an independent exploration and production company, and another top play for investors looking to the Permian Basin. The primary activities of the company are there and in the Mid-Continent area. Cimarex is focused on increasing shareholder value through strategies linked to generating attractive economic returns on capital employed and profitable growth in per-share reserves, production and cash flow. It intends to profitably grow reserves and production through a balanced mix of exploration, exploitation and acquisitions.

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Cimarex has a diversified base of high-quality production and attractive drilling opportunities, and it should be closing on a huge oil and gas asset sale soon. It should be noted that hedge fund gurus Steve Cohen and George Soros initiated sizable new positions in the company recently.

Investors are paid a small 0.6% dividend. The Stifel price target is $130, while the consensus target is $128.18. The shares closed Friday at $101.86.

Pioneer Natural Resources

Many Wall Street analysts love this stock as a pure crude oil play. Pioneer Natural Resources Co. (NYSE: PXD) was the ultimate shale-oil growth story for the past five years and has been eviscerated in the sell-off that started almost a year ago. The stock has s declined over 30% since April and could be offering aggressive investors a potential entry point that could be very timely.

Pioneer is a huge player in the Permian basin and the Eagle Ford in Texas, and it owns more than 20,000 locations in the world’s second largest oil reservoir in the Midland Basin. Some analysts think that the company could add rigs to the tune of up to two per month the rest of this year, and as many as eight rigs in the first quarter of next year.

Pioneer investors are paid a tiny 0.07% dividend. The Stifel price target is $140. The consensus figure is higher at $160.72. Pioneer closed trading on Friday at $122.34.

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There is still a long way to go for the energy sector, and the sledding may remain tough the rest of this year. Investors willing to carve out some capital and plan on holding positions for up to 18 months could be well rewarded.