Goldman Sachs Suggests Buying Calls on Select Big-Oil Names (CVE, XOM, MRO)

Goldman Sachs is out with a research note this morning, where it suggests that traders continue to buy calls on select energy and big oil stocks as volatility is likely to remain high and they expect strong global demand to drive oil prices and oil stocks higher.

The analysts selected nine stocks for call buying based on their price targets, earnings estimates, and multiple expansion potential: Cenovus Energy Inc. CVE, Exxon Mobil Corporation XOM, Marathon Oil Corporation MRO, Diamond Offshore Drilling, Inc. DO, Chevron Corporation CVX, Murphy Oil Corporation MUR, Baker Hughes Incorporated BHI, Halliburton Company HAL, and Hess Corporation HES.

The analysts see 250% return potential on average for individual calls and 300% return potential for a basket calls.

Goldman suggests the following long trades:
• CVE September $35 call for $3.70
• XOM October $80 call for $5.35
• MRO October $49 call for $5.05
• DO September $74.25 call for $6.10
• CVX September $100 call for $6.65
• MUR October $70 call for $6.10
• BHI October $70 call for $7.05
• HAL October $43 call for $5.45
• HES Aug $80 call for $6.90