These Are The Best Energy Stocks To Own Right Now, According To This AI Model

Among the many asset rallies that have taken place over the first quarter of 2019, the area with the most persistent staying power continues to be the steadily rising energy markets, particularly crude oil. After collapsing below 52-week lows, oil futures have rebounded substantially through the first three months of 2019. As of the beginning of April, Brent Crude futures were up more than 25 percent year-to-date, while WTI Crude futures were trading up more than 35 percent on the year.

While this can be attributed in part to overall investor bullishness at the start 2019, other factors like low U.S. shale oil output, parity in natural gas supply-and-demand and U.S. sanctions on Iranian oil exports have supported the rise in crude prices.

Equity traders looking to capture alpha in the energy sector might turn to big names like ExxonMobil Corporation XOM or Schlumberger Limited SLB. However, the global energy picture is much bigger than just the U.S. blue chips, which is why adopting a broader portfolio strategy may help.

As an example, here’s a Stock Model Portfolio from investment research platform Quantamize. The platform’s Global Energy & Power Q-Folio is a concentrated, AI-optimized portfolio that is rebalanced monthly and weighted to maximize return and minimize volatility. These are the Q-Folio’s “Top Buy”-rated stocks as of the beginning of April.

Image courtesy of Quantamize

Driving home just how global the energy markets are, the Q-Folio’s top holdings are two non-U.S. companies, the Portuguese Redes Energéticas Nacionais RENE and China’s CGN Power Co., Ltd. (1816.SEHK).

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The former, Portugal's primary energy infrastructure company, was trading near multi-year highs until mid-March. It was during this time that Redes Energéticas Nacionais experienced an uptick in selling pressure thanks to an announcement from the country’s largest energy company, EDP, that it plans to eliminate some of its conventional generation assets in favor of a massive €7 billion investment in renewable energy generation.

Looking at the charts, that 4 percent dip pushed the stock back below its 50-day moving average, approaching oversold territory.

Image courtesy of Quantamize

Chinese nuclear power concern China General Nuclear Power Group is also trading close to its 52-week high off of encouraging manufacturing data. Also boosting Chinese equities is the U.S. Federal Reserve’s dovish commentary last month, which spurred a broad-based rally in the asset class. CGN’s stock jumped more than 7.5 percent over the course of March.

In addition to the international names, plenty of domestic energy firms are included in the portfolio.  Green Plains Partners LP GPP, which is up roughly 14 percent YTD, has exhibited good fundamentals over previous years, growing revenue and total earnings while maintaining low operating expenses.

Image courtesy of Quantamize

The overall strength in energy, with the help of continued production cuts from OPEC, stands to keep the sector on the upside for the foreseeable future. Nevertheless, finding broad exposure to the sector can ensure some stability, even in the volatile energy markets.

Quantamize is a content partner of Benzinga