Goldman Sachs’ David Kostin points out that US energy stocks have underperformed crude-oil prices and the S&P 500 over the past few months:Although the performance of Energy stocks relative to the broad S&P 500 typically tracks the price of crude oil, the equity sector and the commodity have recently reached their widest divergence in more than five years. Since early December, while the S&P 500 has rallied by 8% and WTI has climbed by 2%, the S&P 500 Energy sector has declined by 3% (Exhibit 4).It’s one area where both mutual funds and hedge funds were overweight coming into the year, the strategist writes in his weekly note. It’s certainly looking more attractive, if this handy valuation chart is to be believed:They say you shouldn’t try to catch a falling knife, but what if the falling knife is tied to another knife, and everyone thinks that knife has already hit the ground, and… well, you can just read more in the usual place.
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Goldman Sachs’ David Kostin points out that US energy stocks have underperformed crude-oil...