My Top Three Cheap Oil Stocks
Three Oil Stocks Under $15
Yesterday, oil hit its highest price level in the past two and a half years.
What caused the jump? Well, OPEC announced that it plans to restore 2.1 million barrels per day, signaling a return to normal production and increased demand.
Today, West Texas Intermediate (WTI) crude is over $70 a barrel – but I see it going to $80 or higher this summer.
Oil stocks have been beaten down by the COVID-19 pandemic. But as oil prices surge, these names will explode.
And no, I’m not just talking about big names like Exxon Mobil Corp. (NYSE:XOM) or Chevron Corp. (NYSE:CVX), running for $61 and $107 per share, respectively.
Today, I’m going to tell you about smaller stocks – each under $15 per share. Because it takes a lot less for a $4 stock to double than a $107 stock…
And with options, we can leverage any move into a massive asymmetrical return.
Here are my top three cheap oil stocks…
- Transocean LTD (NYSE:RIG)
The cheapest name on our list today, RIG sits at just over $4 per share. Back in November, this name was trading at about $0.67 – a 497% increase. As oil prices rise, so will RIG shares – all the way to $5 or higher. How do you play it? Well, the July $4.00 calls are at about $0.45 or so… making for a great cheap bet on the stock making a run.
- Energy Transfer LP Unit (NYSE:ET)
ET hit a yearly high today, trading around $10.34 per share. After a two-day losing streak, this cheap oil name rallied 3.64% by yesterday’s closing bell, outperforming larger competitors like Kinder Morgan Inc. (NYSE:KMI) and Enterprise Products Partners LP (NYSE:EPD). The stock is up 25% year-to-date, and it’s ready to jump even higher as oil prices continue their rise.
- Marathon Oil Corp. (NYSE:MRO)
The last name on our list is the most expensive – trading at $13.78 as I type, hitting its own yearly high. But $13 is nowhere near where the stock is headed if WTI goes to $80 per barrel. And it’s not too late to jump on that upcoming move.
Now, I know I said I wasn’t talking about XOM – it’s not a cheap oil stock, after all. But something’s happening in this big-energy name that we need to talk about today…
Today’s Impact Money Trade
We aren’t the only ones looking at oil today – there’s big money flowing into XOM as well.
Someone bought about 50,000 July $65 calls, betting that this stock is going to make an 8% jump in the next month.
That move is entirely possible in both XOM and the oil stocks I told you about today. Clearly, the energy sector is ripe with opportunity as we head into the summer months.
VIX Traffic Light
The VIX light is red again today, meaning volatility is headed downward as the rest of the market moves up.
Remember, I’m forecasting a VIX drop to 15 and below by the Fourth of July. Today, it sits at about 17.42. And as volatility makes that 14% drop, we’re leveraging the move into an asymmetrical return with yesterday’s UVXY put position.
See where the trade stands today in our Profit Takeover portfolio, right here.
Ask Me Anything: Special Edition
Typically, I reserve our Ask Me Anything issues for Fridays. But this week, I’ve received an influx of questions about the same thing…
Our Nordstrom Inc. (NYSE:JWN) January 21, 2022 $40 calls and our iShares Silver Trust (NYSEARCA:SLV) June 18, 2021 $26 calls.
You may have noticed that these positions dropped off of the portfolio a few days ago.
As we add more and more positions to the Profit Takeover portfolio, we’ve started automating our picks.
What’s that mean? Well, instead of manually updating the prices of each of our open positions, the prices are automatically updated – making them quicker and more accurate, giving you an all-around better experience when it comes to tracking your trades.
The second I make a recommendation, it’s now added to the portfolio.
Now, I made the JWN recommendation live – meaning we don’t have an exact time stamp for entry. Similarly, our SLV recommendation was sent to individual inboxes based on when you replied back to our email – giving each Profit Takeover reader a different entry point.
Therefore, we can’t track these trades automatically.
That doesn’t mean, however, that we’ve closed out of these trades or have forgotten about them. Our JWN and SLV positions are back in the portfolio today – you can check them out right here. And we’ll still update these prices manually, making sure you always know where we stand.
The moment it’s time to exit either of these trades for an asymmetrical profit – like we did with American Airlines Group Inc. (NYSE:AAL) yesterday – I’ll let you know.
In the meantime, you can continue to track them right here.
Until next time,
Mark Sebastian
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June 02 2021
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