Against this background, Ámbito consulted several specialists about the perspectives of the strategic energy sector and inquired about the most profitable companies in the segment both in the local and international terrain.
Is it time to invest in the energy sector?
Nahuel Guevara, portfolio management analyst Inviú held that shares of the energy segment globally, as part of the raw materials sector, knew how to dodge falls well before the drop in the price of oil that led him to drill the $80 barrier. “This is explained by the level of offer and for the uncertainty brought about by the war between Russia and Ukraine. This battle showed that the time for fossil energy has not yet come, even OPEC+ countries show an unwavering stance of not allowing oil to fall“, argued the specialist.
For his part, Gonzalo Gaviña, financial advisor of PPI said he sees a context of high volatility in oil, as is happening with the price of crude oil of US origin (WTI) which is located close to u$s84. And in coincidence with his colleague from Inviuconsidered that this natural resource could be affected in their prices fundamentally for the decisions by OPEC+especially about how to adjust supply in the market, and for him world energy rearrangement, if it reaches further escalate the conflict between Ukraine and Russia.
While, Paul Das Nevesfinancial adviser to Quaestus Advisory stressed that 2022 “has been a very favorable year for energy actions and while all sectors were punished, companies like Exxon, Chevron, Petrobras or Vista had significant increases”.
“The rise in demand for crude oil, produced by market and geopolitical factors, greatly pushed prices up. Nevertheless, the demand forecast for the remainder of 2022 and for 2023 was revised downwards by OPEC+ and the International Energy Agency (IEA)due to both persistent inflationary pressure from the US, China and Europe, as well as geopolitical tension in Europe,” he added.
However, he said that “it is very likely that OPEC+ will reduce its production to compensate for the drop in demand and sustain the price level, for the coming months. That is why, since the international price level is likely to be sustained, this market offers attractive investment opportunities“.
Energy sector: local actions or Cedears
“Being able to invest in shares of foreign companies run by industry leaders builds confidence. The main difference to invest abroad or locally lies in the regulations surrounding commodities, some can affect rates and quote of local oil below international ones,” said Guevara.
In his turn, Gaviña remarked that at energy sector “you have to have it in a good portfolio and he winked at the local market: “If in the next year there is a lack of foreign currency and if there are complications in the agricultural sector linked to the drought, the economic guideline could turn around and would be directed to try to generate currency through that channel“, Expanded the economist.
Which energy stocks have the most upside potential?
Since Inviu highlighted the robustness in the latest quarterly issues of Chevron and Exxonas posted record revenue which have been used for strengthen your balance sheets, reduce acquired debts in times of Covid 19 and have even gone rewarding its shareholders through the repurchase of shares or by granting attractive dividends. “Other good foundations at the international level, we find them in OXYwhich stands out mainly for its prominent cash flow and a good return on equity (ROE)”they emphasized from Inviu.
In the local area, Guevara pointed out that as an alternative to growth in a start-up development of Vaca Muerta, View is a “solid company, which has been able to take advantage of local deposits with a high production efficiency.
The specialist of PPIfor his part, also pondered the oil company OXY, particularly for increased exposure of the last months of Warren Buffet, one of the most visionary investors globally.
However, the specialist highlighted View Energy like a firm with high growth potentialthat in a year it went from being worth u$s2 to u$s11. In addition, he indicated that if the draft Dead cow proliferates, because Argentina needs it as part of its strategic asset energetic, this company would benefit. Also recommended YPF, for his diversified business of lithium, traditional, non-conventional energies and YPF agro, which offer exploitation not only in Dead cow, but in the north argentinian and on the offshore platform near Sea of the Silver. And finally, he suggested Pampa Energy for its good balance and its renewable energy strategy.
Since Quaestus AdvisoryThey also indicated that companies such as Chevron or Exxon, with high market cap, stable cashflow, and reasonable valuation, are alternatives worth taking advantage of for those who want invest in this sector conservatively. Another more aggressive option is the Brazilian giant Petrobras, since according to Quaestus Advisory presents “better prices” than other firms in the industry. However, they warned that this title is a “political trading”as its price is highly influenced by the direction of Brazilian politics.
“In the case of Argentina, the energy market has different drivers to the international marketas It is a heavily regulated sector. and whose Valuations depend more on energy policy or reform proposals, such as the failed Hydrocarbons Promotion Law. However, if you compare companies such as YPF, Pampa Energía, or Vista with the same methodology as international companies, we find that are heavily undervalued with outstanding growth potential. Even, beyond the purely financialThese companies show significant efficiencies in netback or production cost per bbl. For those who can invest in the long term, believing that the local market will join the international market, it is undoubtedly a great alternative,” he concluded. Das Neves.
Source: Ambito
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