The huge surplus of oil that’s been sloshing through global markets is set to evaporate.
The International Energy Agency said Tuesday that it expects the global crude oil glut to start disappearing in the first half of next year, much earlier than it previously predicted.
There is one major condition: OPEC and its partners must stick to their agreement to slash production.
The cartel has agreed to cut its overall production by 1.2 million barrels a day starting in January. A group of non-OPEC nations — including Russia, Mexico, Kazakhstan and Oman — have also committed to slash output.
The collective action helped push prices to a new 2016 high above $53 per barrel on Monday.
Paris-based IEA said in its monthly report that if all parties stick to the agreement, “the market is likely to move into deficit in the first half of 2017 by an estimated 600,000 barrels a day.”
But the IEA also warned that the oil market outlook remains uncertain in the longer term. That’s because the production cuts were only agreed for six months, with a review due in May.
how to invest: Matador Resources Company(MTDR)
Advisors’ Opinion:
- [By Ezra Schwarzbaum]
But despite positioning that would thrash other similar companies, Resolute fought through thanks to significant and efficient productivity in its Delaware Basin assets. Wangler believes the strengthening of previous concern areas will make the company a solid investment.
Matador Resources Co (NYSE: MTDR), $32 Price Target
Matador has grown its reserves throughout the commodity cycle, as well as its production and cash flow. Haas also likes the company’s history of identifying and acquiring acreage early and cheaply. Much of the analyst’s positive outlook is derived from Matador’s successful monetization of midstream assets and pattern of reinvestment.
- [By Ben Levisohn]
Our peer group is up an average of 46% over the past 4 weeks in response to a 30% rebound in the 12-month strip NYMEX oil price. Some of the largest gainers include Hold and Sell rated stocks that we would not chase such asDenbury Resources (Sell, +138%), Halcon Resources (HK) (Sell, +147%), Jones Energy (JONE) (Hold, +166%), Rex Energy (REXX) (Sell, +60%), Sanchez Energy (SN) (Hold, +93%), Ultra Petroleum (UPL) (Sell, +61%), andWhiting Petroleum (Hold, +103%), which have outperformed the E&P Index (+32%) over the same time period. Balance sheets and/or well level returns remain challenged for these companies despite improved oil prices. While we believe oil markets should re-balance over the next 12 to 15 months, the recent recovery to $40 could reverse during 2Q16 as bloated inventories continue to rise, new volumes from Iran pressure an oversupplied market, and a highly anticipated decline in non-OPEC supply (especially in the U.S.), is not as steep as expected. The risk of an oil price retracement, which would significantly pressure the recent out-performers, outweighs the upside in these stocks, in our view. However, we are raising our target prices on Buy ratedAnadarko Petroleum ($54 from $48), Concho Resources (CXO) ($120 from $109), Matador Resources (MTDR) ($22 from $21),Noble Energy (NBL) ($40 from $34), SM Energy (SM) ($22 from $15), Rice Energy ($14 from $12), Pioneer Natural Resources (PXD) ($155 from $135),Continental Resources ($32 from $28), and Parsley Energy (PE) ($24 from $23). We believe our Buy-rated stocks are better positioned to weather challenging oil markets.
how to invest: Astro-Med, Inc.(ALOT)
Advisors’ Opinion:
- [By Monica Gerson]
Astro-Med, Inc. (NASDAQ: ALOT) is projected to post its quarterly earnings at $0.21 per share on revenue of $25.50 million.
Bellatrix Exploration Ltd (NYSE: BXE) is expected to post a quarterly loss at $0.10 per share on revenue of $71.27 million.
how to invest: Duluth Holdings Inc.(DLTH)
Advisors’ Opinion:
- [By Lisa Levin]
Shares of Duluth Holdings Inc (NASDAQ: DLTH) were down 16 percent to $16.20 after the company posted downbeat Q3 results.
Argan, Inc. (NYSE: AGX) was down, falling around 17 percent to $47.50 following Q3 results.
- [By Lisa Levin]
Duluth Holdings Inc (NASDAQ: DLTH) shares were also up, gaining 23 percent to $21.94 as the company reported upbeat results for its fourth quarter on Thursday.
- [By Monica Gerson] Related DLTH After-Hours Recap: CarMax, Wynn, Relypsa, ConAgra, Ruby Tuesday & More Earnings Scheduled For April 7, 2016 Duluth Holdings' (DLTH) CEO Stephanie Pugliese on Q4 2015 Results – Earnings Call Transcript (Seeking Alpha)
Related GPS After-Hours Recap: CarMax, Wynn, Relypsa, ConAgra, Ruby Tuesday & More Gap Comps Down 6% In March; Shares Plunge Difficult March Comparisons Were Too High For Retailers To Beat (Seeking Alpha)
Some of the stocks that may grab investor focus today are:
- [By Monica Gerson]
Duluth Holdings Inc (NASDAQ: DLTH) is projected to post its quarterly earnings at $0.28 per share on revenue of $133.21 million.
DBV Technologies SA ADR (NASDAQ: DBVT) is expected to post a quarterly loss at $0.60 per share.
how to invest: Fitbit, Inc.(FIT)
Advisors’ Opinion:
- [By Chris Lange]
Fitbit, Inc. (NYSE: FIT) reported fourth-quarter financial results after the markets closed on Wednesday. So far year to date the stock is down about 20%, and down even further when looking at the past 52-weeks.Theres no doubt that this stock has taken a beating in this time, but are traders finally coming around and calling a bottom to this stock?
- [By Paul Ausick]
Fitbit Inc. (NYSE: FIT) dropped about 3.3% on Thursday to record a new 52-week low of $5.62. The stock closed at $5.81 on Wednesday. Volume was about 35% below the daily average of around 11.6 million shares. The company had no news, but the ripples are still spreading from the charges leveled by competitor Jawbone over Fitbit’s theft of trade secrets.
- [By Demitrios Kalogeropoulos]
With the benefit of hindsight, it’s clear that the better recent stock buy in the wearables space has been GPS device specialist Garmin (NASDAQ:GRMN) over former market darlingFitbit (NYSE:FIT). It turns out that Garmin’s diverse product line helped it weather collapsing sales in its core automotive division. Targeted innovation bets by Fitbit management, on the other hand, failed to hit the sweet spot of consumer demand amid rising competitive threats.
- [By Leo Sun]
Under Armour (NYSE:UA) (NYSE:UAA), Fitbit (NYSE:FIT), and GoPro (NASDAQ:GPRO) were all terrible stocks to own over the past year. Under Armour and Fitbit were both cut in half, and GoPro plummeted nearly 40%.
- [By WWW.THESTREET.COM]
When it comes to personal electronics, market darling Fitbit (FIT) has clearly lost its mojo, while navigation giant Garmin (GRMN) has made a miraculous turnaround.
how to invest: HHGregg, Inc.(HGG)
Advisors’ Opinion:
- [By Peter Graham]
A long term performance chart shows shares of Best Buy Co all over the place,Aaron’s, Inc (NYSE: AAN) coming in flat for investorsandhhgregg, Inc (NYSE: HGG)severely underperforming:
- [By Peter Graham]
A long term performance chart shows shares of Aaron’s, Inc basicallyabove break even with Best Buy Co Inc (NYSE: BBY)taking off againwhile small capshhgregg, Inc (NYSE: HGG) and Rent-A-Center Inc (NASDAQ: RCII)have both been sliding in recent years:
- [By Paul Ausick]
Hhgregg Inc. (NYSE: HGG) dropped about 53% Tuesday to post a new 52-week low of $0.61 after closing Monday at $1.31. The 52-week high is $2.72. Volume of around 1.5 million was 30% above the daily average of around 2.2 million shares traded. The consumer electronics retailer announced poor preliminary results after markets closed Monday.
- [By WWW.THESTREET.COM]
Just in the past few weeks, Wall Street has seen bankruptcy filings from sporting goods retailer Gander Mountain, RadioShack successor General Wireless Operations, everyday value price department store operator Gordmans Stores (GMAN) and appliances, electronics and furniture retailer HHGregg (HGG) . Last Wednesday, children’s apparel retailer Gymboree cautioned it was running low on cash and may not survive. Sears Holdings Corp. (SHLD) voiced concerns on Tuesday about its ability to stay in business, while women’s apparel chain Bebe (BEBE) is reportedly on the brink of closing all 170 of its stores.
- [By Daniel B. Kline]
Regional electronics chain hhgregg (NYSE:HGG) has decided to close 88 stores and three distribution centers as part of its just-filed Chapter 11 bankruptcy protection plans. The company expects to emerge from bankruptcy in about 60 days and has received funding for the reorganization process from a non-disclosed source.
- [By Lisa Levin]
hhgregg, Inc. (NYSE: HGG) shares dropped 37 percent to $0.820. hhgregg reported preliminary Q3 revenue of $453 million.
Shares of Vince Holding Corp (NYSE: VNCE) were down around 15 percent to $3.67. Vince Holding projects full-year sales and EPS to come in at or below the low end of its earlier issued outlook.
