The three oil stocks that lead their respective industry groups stand out in IBD 50. Comstock Resources (CRK), in the US Exploration and Production group, may be forming new facility. ConocoPhillips (COP), in the International E&P group, regained a buy point this week. And Refiner / Marketing team member Delek US (DK) is forming a cup with handle pattern. All three are options for IBD 50 growth stocks to watch list.
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These industry leaders are ranked highly in The most effective industry group and components of the broader energy sector. When picking stocks, it’s wise to pick market leaders in industry groups that are also performing better than others.
The “L” in William O’Neil’s CAN BE SLOW Investment strategy is all about choosing leaders.
“You should buy really great companies—companies that lead their industries and are number one in their particular niches,” O’Neil writes in Chapter 7 of his book How to Make Money. from securities”.
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Review of fundamentals, industry group ranking
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Comstock Resources activated 7% -8% selling rule after briefly topping the entry in fast sales in a deep V-shaped mug with a handle. However, the stock is receiving important support at the 50-day line. At this point, a new base may form adjacent to the failed pattern.
The oil and gas exploration company shows an average growth rate over three years at the top of 55%. Earnings have also surged in recent quarters.
One note: Frisco, Texas, the company is highly leveraged, as its long-term debt-to-equity ratio has increased to 258% in 2021.
The company reported a 400% increase in earnings to $1 per share on August 1 while revenue increased 175% to $946 million. The third quarter results will come into effect on November 8.
Its RS line has hit a new high this week, indicating strong upside. It has a perfect 99 Composite Rating and leads the energy sub-sector, currently ranking 7th out of 197 industry groups.
Top oil stocks outstrip laggards
ConocoPhillips oil stock broke through the 115.57 buy-in of a cup with a handle on September 14 and plunged, triggering the sell-by rule. MarketSmith Analysis.
Stocks are back now, re-enter shopping area with 118.49 buy points, after finding support at its 50 and 200 day moving averages. The relative strength line also looks strong, especially on the weekly chart.
All-round stellar performance makes stock COP perfect IBD composite rating is 99. Recent earnings growth is a prime example, although previous struggles have dampened EPS rating to 81 out of 99.
The Houston-based oil and gas company is one of the largest operators and producers in the world. Profits rose towards the end of the year, with EPS up 208% in the most recent quarter. It is ranked first in the International E&P group, 15th among the IBD industry groups.
Finally, Delek is a refiner and transporter operating throughout the Southeast and recent entry to IBD 50. DK stock fell more than 6% on Friday but is still forming a cup with a handle with a buy point of 30.97. Its 50-day sell-off.
The energy company holds an RS Rating of 97 and a Composite Rating of 95. It is ranked 9th in the Refining/Marketing group, sixth out of 197 industry groups.
Follow Michael Molinski on Twitter @IMmolinski
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