While most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the hundreds, all the way up to over $1,000 per share or more. At those steep prices, it’s pretty hard to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
We screened the Goldman Sachs research database looking for energy stocks that are likely to survive the current troubles and could very well offer investors some huge returns over the next year or so. With oil still trading near the $40 a barrel level, and all these could be great ideas for aggressive accounts.
While all five stocks are rated Buy, it’s important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Magnolia Oil and Gas
This smaller cap company has been on a wild ride this year and its shares look poised to move higher. Magnolia Oil and Gas Corp. (NYSE: MGY) engages in the business of acquisition, development, exploration and production of oil, natural gas and natural gas liquids (NGLs) reserves in the United States.
The company has oil and natural gas properties located in Karnes County and the Giddings Field in South Texas, primarily comprising the Eagle Ford Shale and the Austin Chalk formation. As of December 31, 2019, its assets consisted of a total leasehold position of 455,964 net acres, including 16,841 net acres with 200 net producing wells in the Karnes County portion of the Eagle Ford Shale, and 439,123 net acres with 846 net producing wells in the Giddings Field of the Austin Chalk.
The Goldman Sachs price target is $7.75, close to the consensus estimate of $7.83. The shares were trading around $5.50 on Friday.
Noble Energy Inc. (NYSE: NBL) is an independent energy company engaged in the acquisition, exploration and production of crude oil, natural gas and NGLs worldwide. Its principal projects are located in Denver-Julesburg Basin, Marcellus Shale, Eagle Ford Shale and Permian Basin of the United States, as well as in deepwater Gulf of Mexico, offshore Eastern Mediterranean and offshore West Africa.
The company has been in the process of a reset in operating cash flow toward gas in Israel, which trades at above two times U.S. gas prices and could substantially contribute to cash flow this year.
Goldman Sachs has a price target of $10.50 for the shares, which is less than the $11.71 Wall Street consensus target. Noble Energy stock slipped below $8.50 last week.