Now is the time to invest in energy stocks, not trade them. Dan Dicker, Senior Energy Analyst at TheStreet tells Jill Malandrino that while certain energy stocks look good for long-term holds, there is still a lot of ground to make up. The key is looking for companies that have properly managed long-term oil prices versus using financial engineering tricks to try to stay alive with crude below $50. Dicker says one of the worst companies is Halcon Resources (HK) as it bought back bonds, but in a very mercenary way by making bondholders take a haircut on prices and take bad stock in lieu of debt in an effort to survive as a company a little bit longer. Even with HK trading at around $1, Dicker would not go near it as the bond restructuring further dilutes the common stock. Other companies that fall under this category include Sandridge Energy (SD) and Goodrich Petroleum (GDP). One of Dicker’s favorite long-term energy plays is EOG Resources (EOG) because the company has acreage that will last for decades and can continue delivering results in shale. Many of the marginal players are dealing with minimal amounts of acreage and once they start to run dry there will be nothing fresh to drill. EOG also has a tremendous portfolio of assets. Hess (HES) is another stock to own for 2016.
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