Oil has been on a declining trend over the past few months reaching lows of $80 a barrel with massive impact on oil stocks. OPEC members are meeting at the end of the month waiting to see what will be agreed upon as members try to prevent a further decline in oil prices. With the OPEC meeting on the horizon, CNBC’s Guy Adami believes Schlumberger Limited. (NYSE:SLB) may be in line to break out of the current trading margins.
Schlumberger Limited. (NYSE:SLB) Impressive run was cut short a few months amidst the falling oil prices with analysts remaining confident that the stock could enjoy an upswing with recovering oil prices. The company also remains strategically positioned to continue benefiting from the climb in U.S. rig count.
“I think this is a stock that wants to break out. The last quarter the numbers were fine the only thing that took it low was the space and movement of crude oil,” said Mr. Adami.
Schlumberger Limited. (NYSE:SLB) Continues to command good valuation metrics as well as strong earnings prospects with the stock being seen to be a little bit undervalued. Schlumberger prospects continue to improve internationally as the company continues to gain momentum in a number of regions.
CNBC’s Steve Grasso, on the other hand, reiterates that in case of declining oil prices it is viable to venture into treasury bonds by going for a stock like iShares Barclays 20+ Yr. Treas Bond (ETF) (NYSEARCA:TLT). After a huge spike in stock price in October, Adami believes that the stock has finally consolidated in the market, offering a perfect opportunity to enter a long position.
There is optimism that the yield in the U.S 10-year Treasury note will continue to rise modestly heading into 2015 consequently offering a clear opportunity for TLT to continue spiking in the market.
Another stock worth watching heading into the OPEC meeting is Magnum Hunter Resources Corp (NYSE:MHR) according to Mr. Grasso. The remarks come on the heels of the stock being downgraded by Imperial Capital to $5 a share down from an initial price target of $7 a share.
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