Slippery no more: How to play the oil stocks now?

Oil stocks are back in the reckoning. Contrary to popular perception that the BSE Oil index has been an underperformer, this sectoral index has given the best returns over the week. It ranked as the fourth best performer on the monthly charts while emerging as a runner-up over the one-year period.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead master your money Realasset
moneycontrol.com

Home » News » Markets » Market Edge

Sep 19, 2006, 12.05 PM | Source: Moneycontrol.com

Slippery no more: How to play the oil stocks now?

Oil stocks are back in the reckoning. Contrary to popular perception that the BSE Oil index has been an underperformer, this sectoral index has given the best returns over the week. It ranked as the fourth best performer on the monthly charts while emerging as a runner-up over the one-year period.

Like this story, share it with millions of investors on M3

Slippery no more: How to play the oil stocks now?

Oil stocks are back in the reckoning. Contrary to popular perception that the BSE Oil index has been an underperformer, this sectoral index has given the best returns over the week. It ranked as the fourth best performer on the monthly charts while emerging as a runner-up over the one-year period.

Post Your Comments

Share Cancel

“Buy, buy, buy,” is what he reiterates when asked how should one play the oil sector stocks now. “Oil bonds, pricing power and cooling crude oil prices, not in this particular order, will be the primary triggers of the PSU oil stocks,” he feels.

 

He also believes that if one has to look at the theory of replacement value these three oil majors are currently available at half their replacement cost. In simple words, if one were to set up a business model similar to these three companies in strength and scale it would require double the amount for what this PSU triad is available. In other words they are available at half their real net worth. 

 

Company

1-week Gain/Loss (%)

1-month gain (%)

1-year Gain/Loss (%)

Aban Loyd Ch

5.44

30.87

146.68

BPCL

0.10

13.14

-1.11

Essar Oil

13.30

25.59

21.02

GAIL

7.19

10.97

18.25

HPCL

1.97

24.30

-6.59

IOC

8.07

28.65

15.42

ONGC

1.66

3.43

26.26

Petronet LNG

-2.62

1.69

-6.40

Reliance

4.87

13.93

96.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amit Dalal of Amit Nalin Securities offers the other side of the same coin. Speaking to CNBC-TV18 today morning he said that the PSU oil companies have given a fair share of appreciation considering the uncertainties that still remain.

 

“Even if oil prices fall we do not know what will happen to the full losses that have accumulated or the bond, which have been issued how long, will they be on the books of these companies. So for the time being these companies are fairly well valued,” he said. 

Having said that he is still very optimistic on IOC and feels this Fortune 500 Company, irrespective of change in price of oil, provides tremendous value and can remains a good buy at every fall. As part of his disclosure he said that he owns IOC.

By Prasanna Zore

1 2

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
Slippery no more: How to play the oil stocks now?

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login