After recommending caution in the big oil space for multiple years, Citi Research analyst Alastair Syme just released a new report in which the firm is finally changing its tune. After a precipitous drop in oil and stock prices during the past year, Citi now believes that integrated oil stocks are no longer overvalued and upgraded the group from Underweight to Sector Weight.

What Is The Upside?

From a value perspective, the price to book (P/B) of the integrated oil group now sits at 1.2x, lower than its troughs in both 2009 and 1998. “Assuming an 8% COE and 0% growth that would put fair value at 1.75x = 45% upside,” Syme explains.

Although risks still remain in the space, Citi now sees value-based downside protection.

Value In Oil

The oversupply in the oil market has pushed…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!