XOP: It Might Be Time To Test The Waters, After A Lazy 2025
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Pearl Gray Equity and Research4.74K FollowersFollow5ShareSavePlay(13min)CommentsSummaryState Street SPDR S&P Oil & Gas Exploration & Production ETF's (XOP) cross asset Z-Score versus SPY and Gold has reached a dislocation point.XOP's portfolio exhibits higher forecasted 3-5 year EPS growth and lower valuation multiples compared to SPY. Though, sector compositions aught to be considered.Supply/demand equilibrium in oil and gas markets, potential demand catalysts, and diversification benefits strengthen the case for a tactical allocation to XOP.Risks include high drawdown potential, ongoing market share battles between OPEN and the U.S., and moderate idiosyncratic risk. Torsten Asmus/iStock via Getty Images I'm quite tired of this "AI trade" narrative, and therefore decided to visit a relatively docile corner of the market (at least for the moment), namely oil and gas stocks. I'm of the view that staying out of the headlinesThis article was written byPearl Gray Equity and Research4.74K FollowersFollowPearl Gray is a proprietary investment fund and independent market research firm. We primarily focus on Fixed-Income and Capital Flows. However, our Seeking Alpha readers can expect a cross-asset blend, extending to analysis of equity REITs (including Preferred Shares), Investment Fund Appraisal, and Bank Risk Analysis.Kindly note that our published content is dispensed as Independent Analysis and Doesn't Constitute Financial Advice. For any content-related concerns, contact Steve Booyens, CFA or leave a message in the comments section.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Kindly note that our content on Seeking Alpha and other platforms doesn't constitute financial advice. Instead, we set the tone for a discussion panel among subscribers. As such, we encourage you to consult a registered financial advisor before committing capital to financial instruments.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.